House Bill 7037, recently adopted this past legislative session, expands the permitted practices of community association managers.
The bill, effective July 1, 2014, enlarges community association managers’ powers, some of which include:
- determining the number of days required for statutory notices;
- determining the amounts due to the association;
- collecting amounts due to the association before the filing of a civil action;
- calculating the number of votes required for a quorum;
- negotiating monetary or performance terms of a contract subject to approval by an association; and,
- drafting pre-arbitration demands.
Some members of the legal community have expressed concern that these new powers could constitute the unauthorized practice of law.
Under the Florida constitution, the Florida Supreme Court has the exclusive authority to both define and regulate the unauthorized practice of law. What constitutes the unauthorized practice of law has been partly defined as “[g]iving legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments.” Also included in the definition are activities requiring the interpretation of statutes, administrative rules, and community association governing documents.
The Florida Supreme Court, in an Advisory Opinion (a nonbinding interpretation of the law) in 2002, stated that community association managers’ preparation of lien claims and determination of the requirements for properly noticing meetings would constitute the unauthorized practice of law—the former, an example of a legal instrument, and the latter inevitably requiring interpretation of a statute and association governing documents. Whether any provisions in the current bill will be challenged remains unclear.
Associations may view the bill as providing a reduction in expenses. However, errors in drafting, misinterpreting a statute or the association’s governing documents could sacrifice short term gains to long term legal costs in correcting an issue. The initial financial outlay for an attorney to prepare these documents can be negligible compared to the expenses incurred in bringing an association into compliance with the law.