The Attorney-Client Privilege and Community Associations
It is important to understand the nature and extent of the
attorney-client privilege within the context of a community association
if for no other reason than to avoid unintentionally waiving it.
A
question that frequently arises in the context of condominium and
homeowner associations ‒ particularly where litigation is contemplated
between the association and one of its members ‒ is: whom does the
association attorney represent?
After
all, since the attorney is paid out of Association funds, doesn’t he or
she represent every member in the Association who contributes to those
funds? As a corollary, doesn’t this mean that each member should
have equal access to the attorney and his or her communications to the
Association?
These are particularly thorny questions for community
association boards that practice “transparency” in their operations ‒
typically an admirable quality. However, “transparency” in a
Board’s operations can become detrimental to an Association faced with
the prospect of litigation, or with an entire dissident group of
members. It is even more problematic when the Board is confronted
with the possibility of suing the developer or one of its own directors
for a covenant violation.
The Attorney Represents the Board
Although it might seem counter-intuitive, for all practical
reasons the “association” attorney actually serves the Board of
Directors (and its committees), and the attorney-client privilege is, or
should be, confined to that relationship. A Board’s interest in
transparency notwithstanding, the Board is well within its rights to
deny a member’s demand to be privy to the oral or written communications
between the association attorney and the Board.
Coextensive with this is the fact that the “association”
attorney can represent the Board against an individual member in its
collection efforts or in a full-blown lawsuit.
Being able to maintain the attorney-client privilege is
critical because, without it, the attorney and Board cannot communicate
frankly about such important issues as the relative merits of the
Board’s legal position on a given issue vis à vis the member’s position,
or the legal strategy the Board has decided to take in the
litigation. You can imagine the difficulty a lawyer would have
effectively representing the client if the opposing party had equal
access to everything the lawyer and the Board communicated to each
other.
Litigation Committee
For a Board faced with litigation, or the prospect of litigation, it is sometimes a good idea to form an ad hoc
litigation committee ‒ and this is particularly so in the case of a
matter involving a fellow Board member. Such a committee enhances
the prospect of maintaining attorney-client privileged matters. It
also enables more efficient communication and decision-making on the
matter being litigated.
Executive Session
Another way to preserve the attorney-client privilege is by
going into “executive session” at a meeting of the Board. To the
extent Board meetings are typically open to members, going into
“executive session” to discuss legal advice -- with or without the
Association attorney -- allows that portion of the meeting to be kept
secret. Key to this is that the executive session must be called
for the purpose of discussing a legal matter and not, for example,
simply to hide a given matter from the membership.
Mum’s the Word
One last thing to keep in mind is that, while the attorney
must maintain the privilege unless expressly authorized to waive it, the
attorney-client privilege can be waived if a particular communication
is made to a person not “cloaked” with the privilege, or if there was
never an intention to keep the communication a private one. This
arises, for example, when a board member ‒ who is having a drink with
his or her next-door neighbor ‒ talks about what the attorney thinks
will happen with the suit. Or, as is more frequently the case, a
board member copies or blind copies an attorney-client privileged email
to someone not covered by the privilege. The privilege can also be
waived if the attorney’s advice is contained in the minutes of a board
meeting and the secretary releases the minutes to the members.
All of the foregoing notwithstanding, there are certainly
appropriate times where the Board can disclose information it receives
from its attorney to the membership, or even wants the attorney to
attend a meeting of the membership to discuss a given issue and allow
members to raise questions directly to the attorney.
The point, in the final analysis, is that the Board has the right to keep such communications from general distribution to the membership, and the obligation to be careful and deliberate about the limited occasions on which it wants to waive the privilege.
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