The HOA Board Quarterly Summer 2014 Issue #10 | Page 10

How Important is a Legal Opinion?

Q
A

UESTION: If the association sought and
paid for a legal opinion, is the board
violating their fiduciary duty if they
ignore the opinion?

NSWER: If board members stick their
fingers in their ears
and refuse to listen
to legal counsel, that’s a
problem. But, if they listen to
the attorney’s advice, weigh
it against other factors and
reach a different conclusion,
they are not in breach of
their fiduciary duties.
Independent Decision. Boards are not required
to let experts and lawyers make decisions for
them. For example, an attorney and a termite
expert might both advise a board to tent their
condo buildings to stop a termite infestation.
After taking into account the cost of tenting,
the financial condition of the association,
and the disruption to members who must be
moved out of their buildings, the board can
decide to spot-treat even though tenting is the
superior method.
Business Judgment. This was the scenario
in a case that made it all the way to the
California Supreme Court. The Court sided
with the board and held that, ...where a duly
constituted community association board,
upon reasonable investigation, in good faith
and with regard for the best interests of the
community association and its members,
exercises discretion...to select among means
for discharging an obligation to maintain
and repair a development’s common areas,
courts should defer to the board’s authority
and presumed expertise. (Lamden v. La Jolla
Shores; Corp. Code §7231(a).)
10 | The HOA Board Quarterly | Issue #10 | Summer 2014

Bad Advice. A second scenario under which
boards can deviate from legal advice is when
they believe the attorney is not knowledgeable
or reliable in the issues presented. For
example, if a divorce lawyer offers legal advice
about HOA corporate
matters, the board can
(and should) disregard
the advice. Instead, they
should seek counsel from
an experienced corporate
attorney with expertise in
community association law.
RECOMMENDATION: Boards should be
cautious about discounting competent legal
counsel. If directors are uncertain about the
advice given, they should get a second opinion.
Adrian Adams, Esq.
Adams Kessler PLC
Legal solutions through knowledge, insight
and experience.” We are friendly lawyers; you
can contact us at [phone] or
[e-mail].