When Should Condo and HOA Boards Seek Legal Advice?

A Spokane homeowners association was recently fined $13,500 by the state for illegally burning a boat dock last June. The burning violated Washington state law because it polluted the air with toxic chemicals. It is presently unclear whether the association will appeal the fine.

Boards of condominium and homeowners associations should consult with their association's attorney before making major decisions like removing structures from their properties. An experienced community association lawyer may have identified the law prohibiting the dock burning, recommended a different method of proceeding, and saved the association a substantial amount of money. Boards considering other important matters like contracts with third parties, proposed amendments to the governing documents, and enforcement actions against owners should also give their association's attorney the opportunity to steer them clear of trouble and advise them regarding the best course of action.

Happy New Year to Washington Condos and HOAs!

2010 has admittedly been a difficult year for many Washington condominium and homeowners associations from a financial point of view. Associations have faced unprecedented struggles in collecting unpaid dues or assessments, funding new reserve accounts, and maintaining existing levels of services. It is impossible to know whether 2011 will be a better year for associations' finances, but there are encouraging signs that this will be the case. My office stands ready to assist your association if it is dealing with delinquency issues or needs guidance with regard to any other legal question. We look forward to helping our current and future clients solve their problems and improve their communities in the year to come.

New Law Limits Scope of Red Flags Rule

A new federal law has significantly limited the scope of the Red Flags Rule, a federal law that requires many businesses and organizations to implement a written identity theft prevention program. There has recently been a substantial amount of confusion about whether the Rule imposes new obligations on various persons and organizations (including community associations), and this new law clarifies who must comply with the Rule. The Red Flags Rule now applies to financial institutions and creditors that:

1) obtain and use consumer reports in connection with a credit transaction,

2) furnish information to consumer reporting agencies in connection with a credit transaction, or

3) advance funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person.

The third category is apparently intended to cover businesses like payday loan companies that sometimes lend without using consumer reports. Creditors who advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person are specifically exempted from the Red Flags Rule. Other types of creditors may be required to comply with the Rule if an agency determines that they offer or maintain accounts that pose a reasonably foreseeable risk of identity theft.

The Red Flags Rule does not appear to apply to condominium and homeowners associations under the new law. However, such associations may still choose to adjust their record-keeping procedures to comply with the Rule if they are concerned that it might be interpreted or amended to apply to them or if they want to obtain a heightened measure of protection against identity theft. More information about the Red Flags Rule is available here.

How to Protect Your Condominium’s Pipes From Freezing Temperatures

It’s cold out there, and it looks like it's going to get colder over the next few days. Condominium and homeowners associations in the Seattle area thankfully do not have to deal with extremely cold weather very often, but they should be aware of five simple steps that can help prevent the inconvenience of frozen pipes.

1. Disconnect hoses.

2. Insulate exterior pipes and faucets.

3. Insulate pipes and faucets in attics, basements, garages, and crawl spaces.

4. Drain irrigation and sprinkler systems.

5. Caulk around incoming pipes.

Boards should also encourage owners to leave their taps running slightly on particularly cold nights. If pipes freeze despite these measures, damage can be minimized by promptly shutting off the water until a licensed plumber arrives. Stay warm!

Should Your Association’s Attorney Be a Hired Gun or a Legal Navigator?

Community associations and the owners in them hire attorneys for many different reasons, but they often fall into one of two camps in terms of how they view attorneys’ primary purpose. Some view them as Hired Guns, while others view them as Legal Navigators.

The Hired Gun listens to the stated goal of the client and aggressively pursues that goal without questioning the goal, the likelihood of attaining the goal, or the method advocated by the client to attain the goal. This type of attorney resembles the classic “yes man” found in some corporate board rooms. Clients who want the Hired Gun want an attorney who will charge forward as they instruct with thoughts of nothing but success.

The Legal Navigator seeks to guide the client out of the wilderness it finds itself in by way of the most effective and efficient path. This type of attorney is quite willing to aggressively pursue the client’s goals using its preferred method when the situation calls for it, but he or she will also not hesitate to tell the client that it has made mistakes in the past that require compromise or that its favored plan of action is not the best one under the circumstances. In other words, the Legal Navigator will not shrink from telling clients things that they do not want to hear. In some cases, a well-timed “No” or “I advise a different approach” can result in lower legal expenses and better outcomes.

The “Charge!” approach of the Hired Gun is appealing to many. However, the clients of the Legal Navigator are much less likely to charge off cliffs.