In what may become a national trend, two states are attacking the issues of whether certain types of activities routinely performed by management companies amount to the unauthorized practice of law.
Last Thursday, the Florida Bar Association's committee on the unauthorized practice of law, agreed to issue an advisory opinion about whether certain activities were considered the practice of law. In 1996, the Florida Supreme Court held that "ministerial actions" taken by managers which do not require significant legal expertise and interpretation do not constitute the unauthorized practice of law. The Florida Supreme Court found, however, that a manager would be practicing law without a license if the actions involved drafting documents requiring a legal description of property (filing of liens), interpreting statutes or governing documents, establishing rights of the community association by making determinations, or by giving advice as to the legal consequences of taking certain courses of action. This new advisory opinion is expected to consider the following 4 items:
In addition to Florida, the State Bar of Arizona issued an advisory opinion in March of 2012 which held that managers and/or in-house lawyers of management companies are engaged in the unauthorized practice of law when they:
Presumably, as a result of this advisory opinion, a class action lawsuit was filed last week by two owners against 22 management companies claiming their practices constitute the unauthorized practice of law and as a result the owners who reside with community associations have been injured.