February 9, 2006

NJ Case Moves Association's Closer to Government Standards

A recent appellate decision in New Jersey is a case that is going to make its way across the country in very short order. To read the details of the case, visit the New Jersey Law Blog. Basically, the court determined that "private entities", in this case a homeowner's association, could not limit an owner's constitutional rights to ceratin freedoms of expression.

This case is going to be debated by attorney's all over the country and board's are going to have to take a serious look at rules and regulations that deal with political signage, flyers related to board elections, flags, and petitions by owners. The courts determined that the "business judgment" rule was not the standard to apply.

As a manager, you might want to take a look at certain restrictive rules and regulations of your associations. A new opinion might be order from the association's attorney.

Posted by joewest at 12:31 PM

August 1, 2005

Managers Giving Legal Advice

Beth Grimm, in her California Condo & HOA Law blog wrote "Managers can learn about the law, and freely quote statutes, articles written by lawyers, and even cases to the Boards. However, when a manager starts to analyze a problem with legal ramifications and interpret how the law or a case might apply in a certain situation, he or she is stepping over the line. And a board that expects this of a manager is asking too much."

The very first board meeting I ever soloed in as a new manager I had the board president ask me a question about the legality of a course of action they were proposing. When I suggested we talk to the association's attorney, he simply said "Fine, but it comes out of your fees, because you're supposed to know these things". Welcome to the real world of association management. Fortunately my boss straightened that out. But every manager eventually faces the questions, either formally or informally, regarding legal issues.

Managers become quite knowledgable about laws, covenants, and rules by working with them evey day, by reading about them in books, professional periodicals and in industry-related seminars and classes. This doesn't make them lawyers, but it does give them enough knowledge to be helpful, or dangerous.

Almost all of the questions I receive through my various web sites have to do with legal issues. This is one of the reasons I don't encourage people to write and is why I don't have a discussion forum. I have to start every response with "I'm not an attorney and can't give you legal advice." I then do what Beth says can be done, point out the various laws and articles available for research, and if the problem is thorny enough, or has a lot of gray area, I strongly suggest they talk to their attorney. More often than not, I get back more questions, letting me know that they probably haven't and won't consult with a lawyer.

One of the more problematic areas is when there is an attorney on the board, but one who knows little about community association law. Then the manager finds him or herself having to decide whether or not to contradict this person when their ego outruns their knowledge. Lawyers are easily elected to asociation boards in the forlorn hope that their presence will somehow reduce the legal portion of the budget.

What is needed is a definitive, or at least detailed, article about the practice of law without a license. How is it defined and enforced? It may not stop boards from asking for advice, but it would at least arm the managers with a good response. The one common denominator of all community association boards in all states is the neverending quest for free legal advice (just check out any conference that has multiple sessions and compare the attendance at the legal sessions vs. the non-legal ones). Until the legal profession provides better tools to fend off this quest, managers will continue to be stuck in the middle.

Posted by joewest at 11:36 PM