Board and attorney communications under attorney-client privilege
Q. I am on the board of my association. An owner recently disagreed with a decision the board made concerning whether an owner or the association was responsible for certain maintenance. The board emailed the association’s attorney for an interpretation of the association’s declaration on the issue. The attorney’s email response discussed the merits of a couple of different interpretations of the declaration, one of which would support the owner’s position and another which would support the association’s decision. The board then forwarded the attorney’s email on to the complaining owner with a note that read “the attorney said the board’s decision was correct.” I objected strenuously to simply forwarding the attorney’s email on to the owner. Was my concern justified?
A. Absolutely. Communication between the association’s board and the association’s attorney is covered by the attorney-client privilege. This means that owners, and other third parties, are not entitled to see such communication. Importantly, such communication is protected from disclosure to the opposing party in litigation pertaining to the issue that was the subject of the attorney’s communication.
Dissemination of the attorney’s opinion to an owner constitutes a waiver of the privilege. That’s generally bad. This means that any communication between the association and association counsel on the subject would have to be delivered to the opposing party in the event of litigation.
Moreover, the release of the attorney’s letter to the unit owner here gives the owner an insight into the potential weakness of the association’s position. This could actually increase the likelihood of litigation and a decision against the association in court. The board here should have simply advised the owner that the board consulted with its attorney and that the board stands by its decision.
Q. An owner in our condominium association approached the board with a request to install an electric vehicle charging station in the common elements. What sort of issues should the board consider in making a decision?
A. I have seen an increasing number of similar requests in associations. The typical declaration of condominium provides that no alterations, additions or improvements shall be made by a unit owner to any part of the common elements without the prior consent of the board of managers of the association.
This would permit the board, which grants the requested permission to install the charging station, to impose conditions on the installation. One such condition would be to require the owner to install a separate electric meter (and pay the electric bill). The owner should provide an engineer’s opinion that the building’s electric service is robust enough to withstand the additional demand, as well as plans and specifications for the installation. Typically, the installation is paid for by the owner; however, other owners who may later seek to use the charging station could be required to reimburse a share of the expense to the owner who installed the charging station.
The owner should be required to obtain necessary building permits and to have the installation performed by an approved and insured contractor, and to be responsible for the maintenance, repair and replacement of the charging station. Whatever is agreed to should be memorialized in a written agreement between the owner and the association.
Q. I am a longtime homeowner in a small townhouse development. Over the years, the board of directors of our association has knowingly allowed individuals who are not insured to do repair work for the association. It concerns me greatly that a contractor who is injured, or who causes property damage, could affect the members of our association. I would appreciate your guidance on this issue.
A. Your concern is well placed. This insurance issue comes up most often with sole proprietors or very small contractors. The failure of the board to require people who perform work for the association to procure and provide proof of appropriate types and amounts of insurance needlessly exposes the association to a risk of loss. This insurance should include workers’ compensation and general liability insurance.
The workers’ compensation insurance will address on the job injuries suffered by the contractor. The general liability insurance will address damage to the property and persons caused by the contractor.
If a person who does not have workers’ compensation insurance is injured, they may claim they were an employee of the association, rather than an independent contractor. This claim can often enough be successful. Where it is, there can be a devastating financial impact on an association that does not itself have workers’ compensation insurance. An association can also protect itself in this instance by maintaining its own workers’ compensation insurance.
Ÿ David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.