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Attorneys - Valuable Members of Association's Professional Team
Condominium associations, home owner's associations, and cooperatives are essentially businesses, requiring their governing boards to exercise judgment and act reasonably to promote the interests of their members. Some members of boards of directors may have knowledge and experience obtained running businesses; others may not. However, all are volunteers, and most directors do not have the time or the expertise to keep up-to-date on legal issues which arise. Thus, it is advisable for associations to retain legal counsel to provide continuous advice and guidance.
Upon election, a board member takes on a fiduciary duty to the association to act with utmost loyalty to the organization and in its best interests. Board members need not be knowledgeable in every facet of management, but they need to be able to make informed decisions. A failure to exercise "business judgment" or to act reasonably may result in liability to the members of the association or to third parties.
This is where the experts come in. Depending upon the particular issue involved, boards can rely upon property managers, accountants, engineers, architects, insurance professionals and attorneys to evaluate the matter, provide explanations and make recommendations.
Why Does an Association Need an Attorney?
There are many instances when legal advice is needed by a governing board. An attorney is typically needed to represent an association in litigation, whether it results from the filing of a lawsuit against the association by an aggrieved member or an injured third party, or whether it is necessary for the association to assert its rights against a contractor or other third party. However, the need for legal advice goes far beyond litigation. An attorney can help an association avoid litigation by providing advice and opinions regarding the association's dealings with others. If a lawsuit is filed, an attorney can suggest alternative means of resolving the dispute and, if possible, coordinate such alternative dispute resolution. Most often, association attorneys are consulted by governing boards for advice and legal opinions as to the promulgation of rules and regulations and enforcement of the governing documents, election procedures, collections, liens and foreclosures, contract review and negotiation, and other day-to-day issues that arise.
For example, an attorney may be consulted with respect to the promulgation of new rules and regulations to assure that they are within the authority of the board and conform to the governing documents. If, for example, board members are concerned that the landscaping is not properly maintained, or that there are dead trees and shrubs throughout the community, the attorney can review the landscaping contract and determine what the association's rights are. The attorney may ultimately be helpful in negotiating a resolution with the landscaper.
An attorney may be called upon to give an interpretation of the governing documents. Legal counsel is often necessary because the governing documents must be viewed in a much larger context, with any applicable enabling legislation, judicial opinions involving similar issues, and public policy. By obtaining professional evaluation and advice, the board can uniformly address homeowner issues such as responsibility for maintenance, liability for damage, and rules enforcement in the community.
Factors to Consider in Selecting an Attorney
Whatever the need of the association is, the decision to retain counsel should not be taken lightly. There are a number of issues to address in order to find the right attorney for your association. The ideal attorney is experienced, fairly priced, responsive, and ethical. An association should expect no less from any attorney it retains.
However, expertise is also important. An association should choose an attorney with sufficient experience in the field. If the association has collections issues, its attorney should be familiar with community association collection procedures including claims of lien and foreclosures. If contract negotiations are the problem, an experienced negotiator in the field is advisable.
It is equally important when the board members interview an attorney that they ask the right questions. How long has the firm been in existence? How long have the attorneys, who will represent the board, been practicing in the field? Does the firm have the resources to service the association promptly and properly, including an adequate size support staff? What legal services will the law firm provide? What will the cost be? These are questions that the Association should and has the right to know before retaining counsel.
References are important when shopping for an attorney. Finding out what other Associations the attorney represents, and whether they would be amenable to serving as references is recommended. Such responses are a good indicator of how the attorney would deal with the association and whether the attorney can meet the needs of the association.
Questioning legal fees is not only appropriate, but is also part of a board members' duty to the association. The board should price out legal fees during the interviewing process as it is customary to negotiate fees.
Price Not Sole Consideration
However, legal fees should not be the main determinant. A lower priced attorney may simply not be able to provide the services the association needs or may not be able to provide such services in as efficient a manner as an attorney who charges a higher rate. Fees should be just one factor to be considered by the board.
Another factor in choosing an attorney is ethics as an association needs an attorney to not only help keep the association out of trouble, but also to earn the respect and trust of other attorneys who may represent adverse parties. Research the organizations to which the attorney belongs. Is he or she a member of the local chapter of the Community Associations Institute? You also can inquire whether any ethical complaints have been filed against the attorney.
Remember, the attorney-client relationship is an ongoing process. An association needs an attorney or law firm that has integrity, is experienced, honest and zealous, and that can render services efficiently, while maintaining sufficient communications with the association to keep the board members informed. A good attorney-client relationship is often vital for board members to exercise their functions properly and thereby fulfill their duties to the association.
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