GalaxyFacts Chat Room

[Mike]

[Mike]

Think the attorney works for you? Guess again!

By Robert M. Meisner, Esq.


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Several years ago, I attended a condominium association board meeting that was followed by a question-and-answer session with me, the association’s attorney. Many of the board members were under the misguided impression that I was at their individual disposal. The board members were facing a recall effort led by homeowners.

One asked: “Well, what’s our defense strategy going to be?”

Another inquired about my legal advice in regard to her remaining on the board.

When I explained that I couldn’t ethically represent them individually even though the case concerned their involvement as board members, they reminded me in clear terms: “We pay your bill!”

This misunderstanding is a common one. While some community association board members may believe that the association attorney should be directly accountable to them as individuals since they hire and supervise the attorney, this is a legal and practical miscalculation and a potential conflict of interest.

The attorney is accountable to the entity that hired him or her, namely the community association itself. The board members manage and administer the community association, but they are not the client.

If the association attorney represents the interests of individual board members or homeowners, he or she may face a severe conflict of interest. What if that member violates the community association bylaws or rules? The attorney may be prevented from taking the necessary legal action against that person on behalf of the association. Since the interest of the individual homeowner is distinct from the corporate entity of the community association, the individuals should seek separate independent counsel.

While the attorney is not accountable to one individual member, the board should appoint a board member to serve as the liaison between the attorney and the full board. This relationship saves time and eliminates confusion by limiting communication to two individuals as opposed to having the attorney communicate and deal with the board members individually.

However, there can be a downside to this arrangement. I recently experienced an unusual situation with a board president who also was serving as the legal liaison. This individual didn’t like the advice I was giving the association on a particular matter and decided to withhold my recommendations from the rest of the board. This seriously hindered the proper functioning of the board. Once the lack of communication came to light, there was a backlash against the president, and the board chose another member to act as the legal liaison. Had the president been sued for breaching his fiduciary duties, he may not have received the protection of certain directors and officers liability insurance, which is negated in some states for intentional acts or omissions such as this.

There also may be times when the community manager thinks the attorney is beholden to him or her. I have seen this happen, particularly in instances when the manager has been instrumental in getting the attorney hired by the association (and perhaps other associations).

Boards sometimes abdicate their decision-making responsibility to the manager, which is not only wrong, but could leave the board open to potential liability. Board members have a fiduciary duty to not relinquish their decision-making power to any other person, including community managers. Neither the board nor the manager should sidestep the attorney and perform any legal action, such as filing liens, which if done improperly could be deemed, among other things, “slander of title.”



Common trouble spots

Potential trouble between attorneys and association boards arises when board members shun the advice of their attorney. They often do not seek the necessary legal advice—and at their legal peril—because they believe it will cost them too much money or they are intimidated by the legal system.

Boards should avoid this mindset. The attorney’s opinion should be respected and considered by the board in its decision- and policy-making process. The board is more likely to be protected from liability if it makes a reasonable business decision based on the advice of the association’s legal counsel.

Another potential area of conflict arises when the board refuses to follow sound business practices. Some board members do not understand that they are effectively running a business. They might be great in their respective careers and occupations, but may not make good business decisions. Board members must rely on the governing documents and applicable laws when running the association, not on their personal beliefs and opinions; the association attorney must ensure that the governance of the association is undertaken in strict adherence to the documents and the laws. In some states, the courts will not interfere with an officer’s or director’s decision if the decision was made in good faith and can be defended under the standards of the “business judgment rule.” You can avoid running afoul of this rule if you don’t have a personal interest in the outcome of the decision, have learned enough about it that you believe the decision is appropriate under the circumstances, and believe that the decision is in the best interests of the association.

Volunteer board members are, by definition, uncompensated and often untrained for their positions, and they are sometimes elected for the wrong reasons. Some board members don’t have the temperament or the economic or business acumen to balance the political, economic, legal and social realities of community association governance. It may appear that I am being unfairly harsh, but this is my experience. This is, of course, all the more reason why board members should take the association attorney’s opinions seriously.



The Board’s Job

The role of the board is to manage and administer the affairs of the community in accordance with the governing documents and applicable laws, including, among other things, maintaining the common elements, planning for the long-range physical and financial condition of the association and enforcing the governing documents. The board may want to undertake a series of audits to help determine the proper future course of the association’s business such as (1) a financial audit to ascertain the need for more reserve funding and the adequacy of the budget, (2) a legal audit to identify provisions of the association documents where the association may not be in compliance, (3) a physical audit to assess the condition of the common elements and to plan adequate financial reserves for their repair and replacement, and (4) an operational audit to determine the effectiveness and legality of day-to-day administration of the association. Generally, the legal and operational audits are performed by the association’s legal counsel, the physical audit is performed by a reserve provider and the financial audit is performed by an accountant.

There is quite a large burden of responsibility placed on a group of volunteers who comprise the board of a community association. There must be a solid, mutually-supportive working relationship between the board and the association attorney so the board can properly establish sound legal policies. If the attorney stays accountable to the association, working through its board of directors, and that board values the attorney’s opinion, the relationship can and should blossom to the benefit of the community association and its members.

[anonymous as well]

First, Steve Braitman if you want to save the association money what better thing than to let people post as anonymously? Considering the Galaxy's history of sueing owners who speak out against the association, just think of the money that will be saved?

And second, new owners are brainwashed that the Galaxy never increased its maintenance fees for years upon years, and that is why we are now in this financial mess. Ha!

BULL DUNG!!

throughout the years Galaxy management and board were quite creative in aquiring plenty of funds, what they did with them, I can't tell you.

The association gave the owners increases along with the association makeing nice profits from the cable tv contract $500,000.00 plus a year, the laundry machines, the parking, the storage, renting the roof for antennas, the recycling, move in move out fees, administrative fees, advertsing in the Galaxy news and on and on. Plus we had 1%, 2%, 3% 4% 5% increases, I know I lived through them during the first years.

But most important is that conveniantly no one mentions the fact that during what some have spun as so-called, no-mnt increase years, we had special line items on our maintence bills such as electric and legal for the oil spill, etc. because it is easier for those in control to go into their blame it on the past mode.

BULL DUNG, DUNG!

What has ruined this place is greedy, self-serving bottom feeders who make a living off the good folks of the Galaxy and will do anything including suing folks who want to shed light on their conduct.

They must stay in power at any cost! That is why people post anonymously!!

Steve it must be nice to have your own board attorney, paid for by all of the association members, to back you up if you get sued!

[Guest]

Even if Ellinger resigns as Director we should get a guarantee he will not accept the position as an appointed non Director Treasurer of the Association. It is possible that a deal was brokered to give up the Director positions in exchange for Ellinger keeping control of the finances as Treasurer.

[Guest]

NONSENSE! HE IS GONE!!!

[Guest]

and who is in control NOW? No one on the current board wanted to be treasurer...why?

[Guest]

Why? It is all about CONTROL and to what measures this Board will do anything in order to maintain that POWER. Any moron can see that they are keeping the Treasurer’s seat warm for Ellinger so that he can step down as President. So tell me also why does Mr. Wonderful/Ellinger set his date of resignation one day prior to the Special Meeting? Maybe he doing the same thing when he lost the elections to Braitman, he made Mak Mak to step down so that the Board votes him back.

The Board meetings are getting so ridiculous and their arguments so frivolous and vindictive that Jerry Springer seems soft compare to these “bozos.” This whole Board makes me sick to my stomach that I will have to go back to my Maalox. The new Board members should be ashamed of themselves for not keeping the promises they made to the people that voted for them. Welcome to the Jungle!

[Mike]

Gerry Drasheff - Hand Picked by the Board to Run The Recall

[Guest]

The BOD meeting 10-18-07 with respect to the recall proxy/ballot portion and other observations.
Why was it so important that Bratiman nominated Lisa Bolasco for the secretary opening which Harlan created when he vacated? Even Lisa said that she does not understand, although she is honored and flattered how they could ask her to fulfill this position when in less than 1 month she may be recalled as a director. Braitman went on to say that it is the directors’ vote of confidence that she take the position. Doesn't this send a message to the unit owners that he is endorsing her and that she should not be recalled? More bizarre is that Fini and Slava also voted for her to serve as secretary.
So much for democracy when I believe Slava stated and Fini expressed in other terms that it would be unfair now in the middle of the process to basically add, amend, alter and blatantly disregard the state of New Jerseys election rules as to leaving photo Id with your vote. Drasheff’s answer and position is basically get another election committee if you don’t like the rules. Buckalew tried to distance himself at times from Drasheff and the election committee but did agree that there is no rule that he knows of that would reject a vote with out proper ID being left at the polls. We live in a time when we read about identity theft. When I purchased I do not recall leaving a photo copy of my drivers license which contains my date of birth. When I voted in the past at the Galaxy I was asked when registering to show my photo ID but never to leave a photocopy. Kaehler tried to define and clear up the uncertainty that Braitman was creating when he started interweaving the words ballot and proxy. Bratman said it is concise Kaehler disagreed.

Once Braitman finally comprehended that all Mary Ellen is doing is delivering votes with the assistance of 3 people from the election committee and that these votes would be part of the total count he raised another question which I believe very few if any got his point. The point was why should there be 2 sets of rules pertaining to photo Id? The mail in proxies do not need photo ID and the walk in voters do need photo ID and must leave a copy of it. Why should the standard be relaxed for the mail in voters and strictly enforced for the walk in voters? Ellinger was clever to give a conditional resignation to take place the day before the Special Unit Owners meeting and vote. Drasheff is raising the bar so high that unit owners will get discouraged and not come to vote in person and bring in copies of photo ID's. It is known that there are more than enough of the so-called needed amount of votes to RECALL the named directors. Drasherffs rules are as good as Ellingers conditional resignation. If this rule is enacted it appears to be a Constitutional violation and interference with the right to poll and elect officials, tampering with votes and passing election rules that shut out the average unit owner and are prejudicial against the majority of voters.

No wonder we are in the predicament we find ourselves in. It is scary when something so clear and obviously stated with the endorsements of 317 unit owners could not be undertaken conclusively and decisively by our elected officials. Instead we have and I hope I'm wrong another disaster waiting to transpire.

[Guest]

The situation is very confusing because we have a complicated set of rules and two ways to vote: by a mail-in ballot (called a specific proxy ballot) and by a proxy--which allows owners to give their ballot to someone else or to direct someone else to go to the meeting and vote on their behalf in person.

In our regular elections, the "proxies" come from the GTCA office and when you pick one up, you provide a copy of a photo ID.

For this meeting, you don't have to pick up a proxy at the office but you do have to supply a copy of a photo ID with the proxy (or have the proxy notarized) .

So, this is nothing new.

Here's where it gets even more complicated. Both sides have apparently been collecting proxies and powers of attorney from owners for several months. These proxies may or may not meet whatever tests are required to be valid.

So there are going to be two kinds of proxies: the official ones (sent to each owner by mail) and the unofficial proxies collected from owners by representatives of both sides. With the unofficial proxies, each one has to be examined to see if it is okay. Does it specify a unit number? Does it have a signature? Does the owner name match the deed for the unit? Is there a date? Is the proxy specific or general?


What is going to happen if multiple proxies are submitted for a unit? Say an owner gave a proxy to someone months ago, forgot about it, and gave the "official" proxy to someone else. Which one counts?

What if there's an old proxy and a mail-in ballot that comes directly from the owner? Which counts?

What if there are two unofficial proxies for a unit? Which counts?

The bottom line is that this is a chaotic situation.

[Guest]

[miked]

Owners' private data put at risk

By Stephen Glassman and Donie Vanitzian, Special to The Times
October 21, 2007
Question: My homeowner association distributed a security form to homeowners, demanding personal information that I refused to provide. When I protested, the association's attorney wrote me this:

"While the association briefly collected the entire digits of owners' personal identification, the association no longer engages in this practice and has destroyed any such information collected in this way. The association is not collecting personal information with any criminal intent. It is collecting information from owners which it intends to use as a means of protecting and enhancing the owners' security.

"Penal Code Section 530.5(b) is inapplicable because the association collects only an incomplete portion of the owners' identification numbers, which is highly difficult, if not impossible, to use for fraudulent purposes. The association's policy is intended to ascertain the true identity of the owners so as to insure that the owners, and not unauthorized third parties, have access to the association grounds." Is the attorney correct? Do I have to give the association my personal information?



Answer: Your board failed to take proper steps in collecting titleholder information. It is irrelevant how "briefly" the association collected "entire digits of owners' personal identification," or that it no longer engages in that practice; they did it.

What's relevant is: Who had access to such data and for how long; are they still employed by management or the association; were confidentiality statements signed; and what method and proof, if any, is there that "the association no longer engages in this practice and has destroyed any such information"?

It is also irrelevant that the association's collection methods for gathering personal information were performed without any criminal intent. That has nothing to do with the level of scrutiny needed to protect each titleholder's rights and interests.

The attorney's assumption that partial numbers make them "highly difficult if not impossible to use for fraudulent purposes" is typical of the complacent thinking that can precede unauthorized use and identity theft. The board must answer questions pertaining to the safeguarding of personal information.

There are no duties within the Davis-Stirling Act requiring the board to enhance the owners' security. The attorney's representation amounts to an admission that the board has created a privacy policy, yet such policies cannot be created unilaterally; they have the same import as "rules," meaning they must be documented and announced in the minutes, then distributed to the members, who have 30 days to object. Under the Davis-Stirling Act, failure to follow those procedures makes the new policy invalid and unenforceable.

Penal Code Sections 530.5(a) and (b) do apply because the association obtained the information willfully. Companies demanding personal information are required to distribute privacy policies detailing how they gather, maintain and dispose of such information and the purpose for which it was collected. Because your board intends to use the information as a means of protecting owners, it must also detail how that protection will occur and at what cost.

Your board's failure to understand its role to safeguard titleholder information amounts to a lack of due care and diligence in its duties and hiring practices. Boards that function outside their statutory duties and then misinterpret the law to cover up their acts subject all titleholders to unnecessary risk. Whether the association has a privacy policy in place, disclosure of this type of personal information is not required and should be rejected as an invasion of your privacy.

Send questions to P.O. Box 11843, Marina del Rey, CA 90295, or e-mail noexit@mindspring.com.

[Guest]

the key words to me... "boards that function outside their statutory duties and then misinterpret the law to cover up their acts..."


You can buy an apartment in the Galaxy without showing your picture or drivers license but you can't vote to recall a director!

[admin]

Who will be in charge of protecting your personal information? Will this lead to another lawsuit? A few years ago they stopped you from speaking to candidates in the lobbies (Councilman Drasheff was in charge of that committee), then they "lost" owners deeds and stopped them from voting (Councilman Drasheff was in charge of that committee), the next year the company Dra sheff picked to run the election didn't show up (Councilman Drasheff was in charge of that committee), and for the recall election this year Drasheff invents a new rule at the last minute which will invalidate 200 recall petitions already collected. so what else is new! In my opinion you will never get a fair election as long as you keep allowing Drasheff to run the election committee. Every year its a new dirty trick and they go hand in hand with the Town and the Galaxy. Monday night at the Town Council meeting the microphone just happened to be disconnected when the Mayor was asked to resign.

[Guest]

HAS THIS MOTIVATED ANY OF YOU COMPLAINERS TO VOLUNTEER TO RUN THE ELECTION COMMITTEE? NO

SO STOP COMPLAINING