By Lindsay Smith, Winzenburg, Leff, Purvis & Payne, LLP.
“You work for me!”
Well, no, I actually don’t. Every community association professional has had a homeowner demand a particular action because, “You work for the homeowners, you work for me!” That isn’t exactly true, and it’s precisely false in the context of a community association attorney. Blurring a vendor’s lines between a homeowner’s request and a Board’s request might be a minor concern when planting annuals outside a patio home, but it is a major ethical problem if the “vendor” is an attorney.
Colorado attorneys are governed by the Colorado Rules of Professional Conduct. Rule 1.13 details an attorney’s duties and obligations when that attorney represents an organization – such as a homeowners association.
First and foremost, the attorney represents the corporate entity itself, “acting through its duly authorized constituents.” This is typically the Board of Directors, but the attorney does not represent the Board of Directors. As an organization’s attorney, I have additional ethical duties to homeowners and members of the public. Specifically, when dealing with directors, officers, members, or other constituents who may have interests adverse to my client’s interests, I must explain that I represent the corporate entity and not that director, officer, member, or other constituent.
This circumstance could arise when a homeowner attempts to initiate a popular Bylaw amendment at an annual meeting. I am obligated to explain that while an amendment to prevent Carol from serving on the Board because she snubbed Rose at bingo last month might sound like a good idea, it’s not an action that is legal to take at that meeting. While all the homeowners present might want to take that action (everyone really hates Carol), it is simply not legal. My duty is to help the corporate entity stay on the right side of the law – and the right side of the law does not include personally-motivated and improperly-noticed Bylaw amendments.
Similarly, other community association vendors need to keep their clients in mind. A paving contractor does not report to Carol or Rose; the contractor reports to the Board or the community association manager. The contractor needs to take direction from those who control the corporation (and its purse strings). If a contractor decides to follow Carol’s dictates, that contractor may find himself in breach of the contract with the community association. Carol might find herself personally liable for her instructions. Avoid this situation and protect yourself, your clients, your vendors, and your homeowners from confusion and unnecessary expenses by ensuring that only the parties who can bind the corporate entity attempt to do so.
Lindsay Smith is an attorney with Winzenburg, Leff, Purvis & Payne, LLP. She represents communities as general counsel in a variety of legal circumstances, from governance and policy considerations to litigation and enforcement. When not attending community association meetings for clients, she relaxes by attending community association meetings.