Listen Up! Top Five Things Lawyers Wish Boards Knew

Listen Up!

While some condos and HOAs have a lawyer present on its board, the majority of boards don’t have a legal expert and often reach out to their lawyer to answer questions, vet documents, send the occasional stern letter to a contractor or recalcitrant resident, and handle any litigation that’s not avoidable by other means.

The problem is that sometimes the board will reach out a little too often and call attorneys about things that boards should already know, have nothing to do with the lawyer or are just the same questions that are asked over and over. Then there are those boards that don’t call their lawyers enough, trying to do things on their own that they shouldn’t be.

It depends on the lawyer and the lawyer/client relationship, but a competent lawyer needs to be prepared to give difficult advice to the board members if the actions are not in the best interest of the association.

We polled some area lawyers to come up with a list of the “Top 5 Things Attorneys Wish Boards Knew.”

Who You Gonna Call?

Sometimes a board might be having a problem with a resident, whether it be his or her unruly actions, disregarding rules or abusing certain common areas. A board that takes matters into their own hands can sometimes put themselves at risk.

“They think that they can solve the problems by themselves and save some money but there are times when an ounce of prevention is worth a pound of cure,” says Mike Freed, a managing partner at Brennan, Manna & Diamond in Jacksonville. “It’s smarter to call an attorney and get ideas on how to address the problem than to take the wrong course of action and have to pay the attorney to fix the problem later because it became a bigger one.”

Most boards are a collection of lay people who don’t understand the difference between a legal solution and a political one.

“They should know that not every solution to a problem is a legal one,” Freed says. “If political, ask yourself, ‘Do you have enough votes to do it this way? Will you get pressure from the neighbors?’ Too often they ask a lawyer a solution to a political problem.”

Aim, Then Fire

Steven Daniels, coordinating partner in the West Palm Beach and Boca Raton law office of Arnstein & Lehr, has several pet peeves when it comes to boards and topping the list is when boards act on an authority they don’t have.

“They tend to as a group or as individuals act outside the corporate structure of the board and decide to do something without evaluating all the consequences of it,” he says. “It creates time, energy and efficiency delays trying to enforce the acts they already have taken or trying to undo those acts. It’s often wasteful and expensive.”

Joshua D. Krut, a partner at Weiss Serota Helfman Pastoriza Cole & Boniske in Fort Lauderdale agrees that boards should call and ask questions before they take any actions they are not sure about.

“For example, entering into a contract or making a major decision or preparing their own documents,” he says. “A lot of times, I’ll see a set of pages that will try to save money on legal fees, but they will spend a lot more when there’s a problem down the road. You should involve your legal, accounting and management professionals in important decisions and consider all legal options before moving forward.”

Don’t Make It Personal

Although it might not seem like a legal issue, one thing that often comes back to bite a board is when they take action based on something outside the rules and governing documents. By doing so, it can create lawsuits down the line.

Board members particularly tend to do this when certain members have personal agendas or vendettas against a particular resident.

“Often people come onto a board with their own issue—fencing, siding, tennis courts, something that bothered them and caused them to run. They put these agendas ahead of the best interest of the association,” Daniels says. “I wish they would instead of working on just their issue, understand the full judiciary perspective on what it is they are charged with. Not just solving their one issue, but all the issues that come up in an ordinary course of a board meeting.”

Freed points out that board members need to recognize that even though they live in a community, it’s a business and making big decisions based on emotions is a mistake.

“Keep emotions out of your decisions,” Freed says. “If someone is really nice and you don’t want to pursue action, you have to. It’s a business. Communicate with your attorney and find the best course of action for all situations, regardless of who is involved.”

Daniels says that some very smart and powerful people join boards when they retire, and that can cause an uncomfortable situation for board members and residents. “These people have lots of time on their hands and still a passion to be in charge of something,” he says. “They are not joining the board for the right reasons and it creates a dysfunctionality because it becomes their ‘job.’ “

Who Can Serve?

It seems like a simple matter but several attorneys mentioned how current board members aren’t always clear about who can serve on the board, especially when it comes to non-owners.

“In order to determine who is eligible for the board, one should look at each of the governing documents (Articles of Incorporation, the Bylaws, and the Declaration) because one or more should state who is eligible to serve on the board,” says Daniel Salas, an attorney at Siegfried, Rivera, Lerner, De La Torre & Sobel P.A., in Miami. “A non-owner would not be eligible unless that authority is specifically granted in the governing documents.”

Incidentally, committees are appointed by the board and may be made up of non-owners, as the governing documents may not exclude them. For example an account, architect or other professional or someone with expertise is often asked to assist the community as a committee member.

Freed says that one of the things he wishes boards would do more is to not try and keep the loudmouths out of the board process, claiming it’s more advantageous to let them have a seat and opinions from the inside, rather than complaining about everything from the outside.

“If there’s a troublemaker who wants to be on the board, let him. Too often, they try to keep that person at arm’s length when in fact, if you put them on the board, that person can’t really effect votes and now has a judiciary duty to act in a certain way,” Freed says. “It deflates some of the noise coming from that person. It’s not absolute, but generally it winds up being better than not.”

Furthermore, boards are often unsure of their power. Many think they have much more say and control of rules than they do, and that can get them into trouble.

“The authority for the board to adopt rules and regulations must be granted in the governing document for which the board is creating the rule,” Salas says. “The board cannot create a rule that modifies the provisions of the bylaws or the Articles or the Declaration, which can only be modified by an amendment which may require the vote of the unit owners as well as the board for amendments to the bylaws and the Articles and always requires the vote of the owners to amend the Declaration.”

If the board has the authority to create a rule regarding the use of the units, written notice of the meeting where the rules will be considered regarding unit use must be mailed, delivered, or electronically transmitted to the unit owners 14 days in advance of the meeting. There is not any requirement that the rules be provided in advance of the meeting, although documents may have a requirement that requires the rules also be mailed.

Communication Liaison

Want to know what irks a lawyer almost more than anything? It’s when several people from a board call about the same matter or when three different board members reach out on the same day to discuss three different issues.

“What we like to recommend to our boards is that one person—be it the board president or someone agreed upon—be the sole contact to the attorney,” Freed says. “This lessens confusion and also keeps the expense down.”

Salas adds that by doing so, it provides a much more structured flow of information to the board and keeps the attorney better in the loop.

“Part of the responsibility of a lawyer is to go over to the board when you first get hired and take to them about how best to work with us and we’ll give out our phone numbers, emails and the best way to contact us and let them know we are always available to answer their questions,” he says. “Part of that orientation should be deciding on that one contact so everything runs smoothly in the lawyer-board process.”

Keith Loria is a freelance writer and a frequent contributor to The South Florida Cooperator.

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