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September 27, 2005
Tight With Information About Association Professionals? - Why?
A frustrated website visitor recently asked me:
"I was told by the Property Manager of my HOA that we have an Association Attorney. I asked him who the Association Attorney was and I was informed in was none of my business and I had no legal right to know. I’m having a hard time accepting that due to the fact that I am paying for this attorney via my HOA fees. As a homeowner am I not entitled to know who our Board of Directors has contracted with including attorneys. Without this knowledge how can the homeowners be sure that there is not a conflict of interest between the Board and who the Board contracts with if they are not entitled to this information. Also is not the Board responsible for providing explanation of expenditures and where our money went. I was under the impression that as a member of an HOA I had certain rights. Please let me know. Thank you."
I know of no law or case that definitively says whether an Association must disclose the name of the Association's attorney (in California). Owners have rights to review certain financial records and documents and after January 1, 2006, the rights are expanded, except that documents subject to confidentiality are not among those to be provided. Attorney statements and communications are subject to confidentiality under cases and statutes and so they need not be provided for inspection or copying, even under the new statutes. So the question remains, is there any requirement to disclose the name? Probably not, but why withhold it? Perhaps if there is a possibility of harrassment, a history of problems with an Owner interfering with Association contractors, or some extenuating circumstances, it might be acceptable. But under the new statutes requiring disclosure of records that would require redaction to prevent exposure for identity theft, the legislature probably did not contemplate the withholding of names of vendors and professionals serving Associations. I would assume that if there is a fear an Owner might contact the Association's attorney without authority, that protecting the attorney is not necessary - most attorneys would know how to handle a call or contact from an owner.
This brings me to address the comment about the owner's rights of access and information given that the assessments paid by the owner help pay for legal services. Many times owners assume that since the assessments they pay are used for legal services, the owner should have access to the attorney and be able to ask for legal advice. The truth is that when a corporation (which most HOAs are in California) hires an attorney, the attorney has an ethical obligation to and takes its guidance and direction from the Board, not individual owners, and not any individual member of the Board. The corporation is the client.
As for the question of conflict of interest, if an owner suspected that the Association attorney was married to a board member, or had some similar close relationship, and that fact was not disclosed to the members, there would be a conflict of interest. However, this is because the association must disclose any contracts or vendor relationships that provide a board member direct or indirect financial benefit. But the fact that the association attorney advises the Board based on information received from the Board does not create a conflict of interest as to the members, who might wish for equal time or free legal advice from the association attorney.
Posted by Beth Grimm at September 27, 2005 10:05 PM