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CAMS BE CAREFUL ABOUT THE UNAUTHORIZED
PRACTICE OF LAW
By
Eric Glazer, Esq.
Published October 17, 2016
Last year we blogged about a long awaited
decision by The Florida Supreme Court regarding what a licensed
community association can do, without being accused of
practicing law without a license. It bears repeating. 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:
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Preparation of a Certificate of
Assessments due once the delinquent account is turned over
to a lawyer;
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Preparation of a Certificate of
Assessments due once a foreclosure of the unit has
commenced;
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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.
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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:
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.
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.
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.
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.
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Drafting of
pre-arbitration demand letters;
Holding – this task is ministerial in nature and is
not considered the unauthorized practice of law.
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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.
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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.
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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.
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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.
Regardless of what you think of the decision
--- CAMs are well advised to abide by it or face the risk of
being charged with the unauthorized practice of law and face a
host of possible penalties. Not only should CAMs be careful, but
Board members need to understand the decision of the Florida
Supreme Court just as much as the managers do ----- and make
sure not to ask your community association manager to take the
role of the association’s attorney.
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About
HOA & Condo Blog
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Eric Glazer graduated from
the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for more than 2
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decades and is the owner of Glazer
and Associates, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
He is the first attorney in the
State of Florida that designed a course that certifies
condominium residents as eligible to serve on a condominium
Board of Directors and has now certified more than 10,000
Floridians all across the state. He is certified as a Circuit
Court Mediator by The Florida Supreme Court and has mediated
dozens of disputes between associations and unit owners. Eric
also devotes significant time to advancing legislation in the
best interest of Florida community association members.
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