Thursday, June 24, 2010

When the Board Should Really Call the Association Attorney – Part I

As I mentioned yesterday, the next few blogs will address situations that really require a call or meeting with the association attorney. Here are a few examples:

•You are entering into a contract. Any contract. Why? If a vendor has given you a contract (and 9 times out of 10 it is a one-page proposal) that agreement was drafted with the vendor’s protection in mind not yours. Vital provisions ensuring that the work is under warranty, that the contractor will finish on time, that the association will not have to pay for the contractor’s gross negligence, etc. all need to be in there and usually they are conspicuously absent! In addition to wanting protective language in the agreement, you will want any harmful language inserted by the vendor or vendor’s counsel out; this includes automatic renewal clauses that trap the association into an endless cycle of bad service.

•You are hiring or firing an employee. There are all sorts of issues that must be considered prior to hiring (to protect you from a negligent hire claim down the road should the employee go on to do harm) as well as prior to firing (to protect you from possible discrimination and other claims). While Florida is an employment at will state meaning an employer can terminate an employee for any reason other than a discriminatory reason, there are still a myriad of sensitive issues that must be addressed including whether or not the personnel file properly documents employee infractions or other problems. Don’t go this one alone. In fact, if the association has any employees or independent contractors it should consult with legal counsel to ensure that its employment manual complies with all federal and local labor laws, that employees are properly classified as exempt or hourly, that background checks are being conducted with proper advance notice and consent, etc.

•You are contemplating rejecting a proposed lease or purchase application. Again, this is an area fraught with potential liability if it is mishandled. You must ensure that you have the authority you think you do in this regard as well as that you have been applying your standards uniformly and routinely. In this real estate market, a lost sale or lease will almost certainly be met with some form of consternation from the owner or the realtor. Before boxing yourself into a corner, make sure you are correct.

•You have been served with a lawsuit, DBPR Complaint or a Code violation. It is usually advisable that the law firm serve as the association’s registered agent in order to avoid any delay in sending over time sensitive matters for handling. Being named as a defendant in a lawsuit or a Code violation is one area that absolutely mandates a conference with your attorney to map out a strategy.

•You are considering a complete remodeling project for your community. What may seem absolutely necessary and advisable to the board might actually be a material alteration of the common elements or areas which requires a membership vote. Nothing riles owners up more than the thought of a board spending money on projects for which the enthusiasm is not shared by all. Responding to a complaint from an owner after the project is completed puts you in a defensive posture and, depending on the outcome of that complaint, might put you in breach of a contract with your vendors on the project; better to handle it correctly from the beginning.

Stay tuned tomorrow for further examples.

2 comments:

  1. Donna what scares me is this. It seems to me in these days and times any move we would like to make we should really contact our lawyers. I myself have gotten to the point of not deciding on anything till l contact our assoication's lawyer. It was never like this. Being President of a condo assoc you are in a position to make desisions but l find myslef asking myself if l did the right legal thing.

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  2. It certainly seems ridiculous and costly to have to run your attorney every time you want to make a decision as a board. Living in our litigous society doesn't make a director's stress level any better either. For the topics and issues discussed in the blog, getting a lawyer's opinion at the very least provides the board with a safety net that they were not acting aribtrarily or capriciously but were, in fact, acting upon advice of counsel. It is not a cure-all but it does take away the ability to claim the board was acting willfully or maliciously.

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