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How Far Can Managers Go? Florida's Perspective on Managers Practicing Law
At the CAI Law Seminar held in January, 2006 and recently on the CondoLawyer listserve, there have been several interesting discussions concerning when action or conduct by a manager constitutes the unauthorized practice of law. While there was some consensus (e.g., interpreting and drafting legal documents), there were also considerable differences of opinion.
When these discussions arise, attorneys generally are reluctant to voice their opinions for fear of appearing self serving. While cases involving the unauthorized practice of law are extremely rare, it is perhaps useful (and certainly interesting) to review a 1996 opinion from the Florida Supreme Court. Having been asked by a manager for an advisory opinion on what actions constituted the unauthorized practice of law the Court said the following actions could be performed by managers because they were simply ministerial in nature and therefore did not constitute the unauthorized practice of law:
- Completing a change of Registered Agent with the Secretary of State's office;
- Filing a periodic report with the Secretary of State's office;
- Preparation of status letters for title companies, lenders and sellers; and
- Preparation of certain notices regarding elections , provided they do not involve the interpretation of governing documents or statutes.
The Court found the following manager conduct constituted the unlicensed practice of law and was therefore prohibited by law:
- Preparing an assessment lien or release of lien (which requires a legal description, establishes the rights of the association, acts as on encumbrance on the property, and thus determines substantial legal rights);
- Responding to board questions concerning the application of law to specific matters being considered or to advise boards that a certain course of action may not be authorized by law or governing documents; and
- Interpretation of statutes and governing documents.
- Drafting or preparing legal documents by which legal rights are obtained, secured or given away.
- Determining the number of votes necessary to take certain actions where the determination would require the interpretation and application of statutes and the association's governing documents.
The court also took note of the differences of drafting a document for an association versus advising an association of the legal significance or consequence of the document. In certain factual circumstances the former may be acceptable conduct by a manager, but the latter would always constitute the unauthorized practice of law.
Are there real consequences of the unauthorized practice of law or is it just an esoteric discussion with no real meaning? Probably a little of both, until a manager is cited for practicing law without a license or is sued and suffers a large judgment by an association for doing something only lawyers can do, not much is going to change. But it is food for thought.
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