Whether you serve on the board of a community or homeowners’ association or that of a condo building, chances are that you and your fellow members are volunteers. Perhaps you’re fortunate enough to have a board member on your team with professional legal expertise. But even if that’s the case, sooner or later you’ll need to consult with outside counsel on some issue–whether it’s the sale of a unit, an acrimonious situation between neighbors, or between a resident and the board itself. When that day comes, it pays to keep a few things in mind before picking up the phone (and starting the billable hours clock) to call your building’s attorney.
We polled community association lawyers across the country to find out the top half-dozen things they wish boards knew...before lawyering up.
Don’t ‘Just Wing It’
Any board worth its salt is concerned about controlling costs and working within a budget; board members know it’s not fiscally responsible to get a lawyer (or an accountant, architect, engineer) involved in every little issue that crops up. That being said, the converse – not ever calling in the pros – can be just as problematic, and costly.
“We see boards making a lot of contractual missteps with vendors,” notes Matthew McAlonis, an associate with The Clarkson Law Group, which has offices in Las Vegas, Reno, and San Francisco. “Oftentimes, an association will have a provision in its bylaws that dictates the lengths of contracts it may sign; it may prohibit the board from engaging in a term over one year, for example. Despite this, we’ll see board members inadvertently execute a contract for three or four years. Or we’ll see an instance wherein a board is unhappy with a vendor, so they unilaterally terminate a contract, rather than reaching out to an attorney just to get an idea as to how they should properly end the relationship. A breach of contract can lead to litigation if you enter into these things haphazardly.”
“Every association should have an attorney upon which it can rely for advice,” adds Mark Roth, a partner at the Chicago law firm of Roth Fioretti, LLC. “A good attorney well-versed in association law will generally save an association much more than the cost of that lawyer’s advice. Boards should consult their association attorney before a contemplated action is taken— not after.”