What do you call a bus full of lawyers driving off a cliff? A good start!
If there is any profession that is the butt of more jokes than bad used car salesmen, it has to be attorneys. As with any industry or service, you have the good and the bad, and the ambulance chasing briefcase wielding lawyer is often what we think of when we think of attorneys!
During my formative years, my best friend’s father was a lawyer. The best advice he taught me was that only a fool would use himself as an attorney!
This statement holds true not just for individuals but for homeowners associations as well. No one really wants the expense of legal advice, until they need really good legal advice. Just hearing the word “lawsuit” is enough to keep most people awake at night.
Having good legal representation is a must for any well run homeowners association. Under no circumstances should a board of directors attempt to curtail expenses by avoiding legal counsel.
The added costs to the HOA as a whole can be far more devastating than any expense incurred for your counsel’s legal fees because of issues the board can cause, whether or not intentionally. Board members may try to save money for the owners by avoiding legal fees because the natural tendency for most people is to avoid lawyers at all costs.
When it comes to dealing with day to day legal issues that may arise, property management works with the board members to discuss any legal topics or issues at hand. The PM should (and in some states may be required to) have a basic understanding of property management law so they can assist their community in running it according to the governing documents, such as the bylaws and declarations.
This can include elections of board members, collections of dues procedures, tax reporting, filing suits or enforcement of action, etc. This does not mean your property manager is an attorney, nor should a board put undue pressure on a PM to come up with answers just to avoid legal expenses!
Just as the PM coordinates vendors for property maintenance, management assists dealing with counsel per the board’s direction. The board guides the PM on issues they want handled by the attorneys on legal matters, and the PM makes sure those tasks and communications are completed. In most cases, the black and white questions posed to the PM can typically be answered without legal expense.
It is the gray area questions when it will be relevant for the board to seek the opinion or answers by legal counsel. This is especially true for issues dealing with owners with past due accounts, filing legal action and/or liens against owners and similar questions that may fall outside of the PM’s general knowledge.
A good property manager or management firm should not only be there to assist the board in getting their legal questions answered, but the PM should also be a good steward in tracking these expenses to make sure they are justified.
Just because the attorney works for a large expensive firm doesn’t mean the HOA is getting the best advice. Legal advice does not have to be exorbitant in price to have value, and a smaller local firm with real estate background can often provide the same answers at a fraction of the cost
If you value your time, hiring the right HOA property manager can be the best time management/investment any HOA board can make on behalf of the owners. It gives piece of mind knowing you have pros watching over and guiding you along the way!
Since 1997, real estate investor and broker Christopher Benedict has been involved in all phases of realty investment and property management. From agent, to broker and business owner, he now focuses on growing his base of investor clientele.