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THE LAWYERS V. THE
MANAGERS --- SO WHO WON?
By
Eric Glazer, Esq.
Published May 25, 2015
The long awaited decision by The Florida
Supreme Court is finally in regarding what a licensed community
association can do, without being accused of practicing law
without a license. The Florida Bar tried hard to curtail what
community association managers can do without a license to
practice law, while the community association managers argued
that most tasks required of community association managers
certainly do not require three years of law school and passage
of the Bar exam. Here is how the court ruled:
The Court first spoke about what generally is
considered the practice of law and said:
In determining whether the giving of
advice and counsel and the performance of services in legal
matters for compensation constitute the practice of law it is
safe to follow the rule that if the giving of the advice and
performance of the services affect important rights of a person
under the law, and if the reasonable protection of the rights
and property of those advised and served requires that the
person giving such advice possess legal skill and a knowledge of
the law greater than such possessed by the average citizen, then
the giving of such advice and the performance of such services
by one for another as a course of conduct constitutes the
practice of law.
The practice of law also includes the
giving of legal advice and counsel to others as to their rights
and obligations under the law and the preparation of legal
instruments, including contracts, by which legal rights are
either obtained, secured or given away, although such matters
may not then or ever be the subject of proceedings in a court.
Upholding a prior 1996 decision in all
respects, The Florida Supreme Court again found the following
activities when performed by a CAM to constitute the unlicensed
practice of law:
Completing the frequently asked question and
answer sheet;
Drafting a claim of lien, satisfaction of
lien, and notice of commencement;
Determining the timing, method and form of
giving notice of meetings;
Determining the votes necessary for certain
actions which would entail interpretation of certain statutes
and rules; and
Answering a community association’s question
about the application of law to a matter being considered or
advising a community association that a course of action may not
be authorized by law, rule, or the association’s governing
documents.
On the other hand, the 1996 opinion found
the following activities not to constitute the practice of law:
Completion of the change of registered agent
form and annual report form;
Drafting certificates of assessments;
Drafting first and second notices of date of
election;
Drafting ballots;
Drafting written notices of annual or board
meetings;
Drafting annual meeting or board meeting
agendas, and
Drafting affidavits of mailing.
The 1996 Court opinion found the following
activities to be dependent upon the specific circumstances:
Modification of limited proxy forms
promulgated by the state;
Drafting a limited proxy form;
Drafting documents required to exercise the
community association’s right of approval or right of first
refusal on the sale or lease of a parcel.
The 1996 Court opinion found the following
to be ministerial and could be performed by a CAM:
Modification of a limited proxy form to
include the name of the community association;
Phrasing a yes or a no voting question
concerning either waiving reserves or waiving the complied,
reviewed or audited financial statement requirement;
Phrasing a yes or a no voting question
concerning carryover of excess membership expenses; and
Phrasing a yes or a no voting question
concerning adoption of amendments to the Articles of
Incorporation, Bylaws or condominium documents;
The Court also found that the drafting of
documents required to exercise a community association’s right
of approval or first refusal to a sale or lease may require the
assistance of an attorney, since there could be legal
consequences to the decision.
The Court then went on to address 14
additional activities that community association managers
typically perform. Here they are:
1. Preparation of a Certificate
of Assessments due once the delinquent account is turned over to
a lawyer;
2. Preparation of a Certificate
of Assessments due once a foreclosure of the unit has commenced;
3. Preparation of
Certificate of Assessments due once a member disputes in writing
to the association the amount alleged as owed;
HOLDING – preparation of each of the three
documents do not constitute the practice of law.
4. Drafting of amendments
(and certificates of amendment that are recorded in the official
records) to declaration of covenants, bylaws, and articles of
incorporation when such documents are to be voted upon by the
members;
HOLDING – the preparation of these
documents constitute the unlicensed practice of law
5. Determining
the number of days to be provided for statutory notice
Holding – if the determination of the
number of days to be provided for statutory notice requires the
interpretation of statutes, administrative rules, governing
documents or rules of civil procedure, then, it would constitute
the unauthorized practice of law for a CAM to engage in this
activity. If the determination does not require such
interpretation, then it would not be the unlicensed practice of
law.
6.
Modification of limited proxy forms
promulgated by the state;
Holding - If there is no discretion
regarding the wording, and it is a yes or no question it is not
the unauthorized practice of law. However, if the question
requires discretion in the phrasing or involves the
interpretation of statute or legal documents, the CAM may not
modify the form.
7.
Preparation of documents concerning
the right of the association to approve new prospective owners;
Holding – if the preparation requires the
exercise of discretion or the interpretation of statutes or
legal documents, a CAM may not prepare the documents. For
example, the association documents may contain provisions
regarding the right of first refusal. Preparing a document
regarding the approval of new owners may require an
interpretation of this provision. An attorney should be
consulted to ensure that the language comports with the
association documents. On the other hand, the association
documents may contain a provision regarding the size of pets an
owner may have. Drafting a document regarding this would be
ministerial in nature as an interpretation of the documents is
generally not required.
8.
8.
Determination of affirmative votes needed to
pass a proposition or amendment to the recorded documents.
9.
Determination of owners’ votes needed
to establish a quorum;
Holding – if these determinations require
the interpretation and application of statutes and the community
association’s governing documents, then this would constitute
the unauthorized practice of law. If no interpretation is
required – they would not.
10.
Drafting of pre-arbitration demand
letters;
Holding – this task is ministerial in
nature and is not considered the unauthorized practice of law.
11.
Preparation of construction lien
documents (e.g. notice of commencement and lien waivers, etc.);
Holding – This is a very complicated and
technical area of the law - Preparation of these documents would
constitute the unlicensed practice of law.
12. Preparation,
review, drafting and/or substantial involvement in the
preparation/execution of contracts, including construction
contracts, management contracts, cable television contracts,
etc.
Holding – Preparation of these documents
constitute the unlicensed practice of law.
13.
Identifying, through review of title
instruments, the owners to receive pre-lien letters;
Holding – if the CAM is only searching the
public records to identify who has owned the property over the
years, then such review is ministerial in nature and not the
unauthorized practice of law. In other words, if the CAM is
merely making a list of all record owners – no violation. If
however the CAM uses the list and then makes the legal
determination of who needs to receive the pre-lien letter, this
would constitute the unlicensed practice of law because it
involves an analysis as to who must receive the letters.
14.
Any activity that requires statutory
or case law analysis to reach a legal conclusion.
Holding – It would constitute the
unlicensed practice of law for a CAM to engage in activity
requiring statutory or case law analysis to reach a legal
conclusion.
So…….what do you think? Do you agree with
the opinion of The Florida Supreme Court? Were CAMs given too
much power or too little? Did The Florida Supreme Court get it
just right?
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