Attorneys and community association managers can be a godsend for the board of a co-op, condominium or HOA. Most boards consist of volunteers who usually have quite busy external lives themselves, so having an experienced professional on the team for advice, guidance, and enforcement of policy can be a huge help.
But even so, it’s the board that is elected by residents to uphold their community’s best interests, and the board that is accountable for major decisions. Over-reliance on third parties such as managers and attorneys can sometimes lead to internal issues, especially – but not only – if those third parties are not acting in good faith. That’s why it’s imperative for board members to understand when to delegate and handle things internally, as well as how to identify when that trusted adviser may be overstepping his or her bounds. A board that hands over the keys to its kingdom to an unelected party is courting trouble – and the wrath of its constituents.
Know Your Role
“A board needs to make sure that it has all of the information necessary in order to have productive discussions and make proper decisions,” says Pamela Lytle, manager of Winnetka Mews Condominium Association in Winnetka, Illinois. “I believe that the best boards use their professionals – whether manager or attorney, accountant or engineer, etc. – liberally, and that a liberal use will shield the board from liability.”
To be clear, however, a board should think of itself as the primary decision maker on all association matters. Any advice should be evaluated on its merits – not followed blindly. “Some boards simply permit the managing agent to make all of its decisions, which is not correct,” warns Caroline Record, a partner at the Cedar Knolls office of law firm Hill Wallack LLP. “I advise boards that they are ultimately responsible for any and all decisions made by the manager, and, as such, they should know what that person is doing. I have not worked with a board that has been over-reliant on me. I try to stress to both boards and managers that I am around for questions and consultation and to lay out options, but I will not be making any decisions for them. That’s what the board members were elected to do.”
Record stresses that boards have reasonable and realistic expectations for management and legal counsel, and that these professionals should be treated as such. “When comments become personal and/or nasty, and there is constant bickering, it’s probably time to make a change such that the corporation is best served by those elected and retained to act in its best interests,” she says. “I suggest that a board has the right to ask for a change in manager by the management firm in the management agreement. Board members can resign, and professionals can as well, should the tensions get too high. I’ve done it myself!”