On May 14, 2015, the Supreme Court of Florida issued an Advisory Opinion regarding which activities of community association managers are and are not considered the “Unlicensed Practice of Law” (UPL). The Advisory Opinion is No. SC13-889. In the Advisory Opinion, the State’s highest Court adopted the position of the Florida Bar’s Standing Committee on UPL which in part i) reaffirmed the Court’s 1996 advisory opinion of Florida Bar re Advisory Opinion-Activities of Community Association Managers, 681 So.2d 1119 (Fla. 1996), ii) expanded on certain activities that are considered UPL, iii) explained that certain activities may or may not be UPL depending on the circumstances, and iv) may have created some confusion which will be cleared up for the readers of this article. By way of background, Court’s adoption of the Advisory Opinion has the same force and effect of an order issued by the Court, and readers should take note that the Florida Legislature enacted laws in 2014 pertaining to this very subject that in a few instances are contrary to the Court’s adoption of the Advisory Opinion. To clear up the potential confusion, know this – the Court’s May 14, 2015 adoption of the Florida Bar’s Standing Committee Advisory Opinion on UPL trumps the 2014 legislation.
New legislation adopted on July 1, 2014 to section 468.431, Florida Statutes provided additional activities that a community association manager may perform. Of relevance to the Court’s adoption of the Advisory Opinion, section 468.431(2), Florida Statutes, provides that a community association manager may determine the number of days required for statutory notices and may calculate the votes required for a quorum or to approve a proposition or amendment. While such activities may be within the community association manager’s ability to perform, the Advisory Opinion provides that these activities may constitute the unlicensed practice of law depending on the specific factual circumstances.
Further, the changes to section 468.431(2), Florida Statutes, also adopted on July 1, 2014, provides that a community association manager may negotiate monetary or performance terms of a contract subject to approval by an association and may complete forms related to the management of a community association that have been created by statute or state agency, which includes release of lien, pre-lien notice and pre-foreclosure notice forms. However, because the Supreme Court of Florida has now ruled that the drafting a claim of lien and satisfaction of lien form and that the preparation, review, drafting and/or substantial involvement in the preparation/execution of contracts (construction contracts, management contracts, cable television contracts, etc.) constitute the unlicensed practice of law when performed by a community association manager, the related activities as provided by section 468.431(2), Florida Statutes adopted, are greatly abridged and are abrogated by the Court’s adoption of the Advisory Opinion.
The following activities when performed by a community association manager are NOT considered UPL and may be properly conducted by a community association manager:
• Completion of the change of registered agent or office for corporations form and the annual corporation report form as provided by the Secretary of State,
• Drafting certificates of assessments,
• Drafting first and second notices of the date of an election,
• Drafting ballots,
• Drafting written notices of annual or board meetings,
• Drafting annual meeting or board meeting agendas,
• Drafting affidavits of mailing, and
• Drafting a pre-arbitration demand letter required by section 718.1255, Florida Statutes.
On the other hand, the following activities are considered UPL when performed by a community association manager (or other non-lawyer):
• Completing a frequently asked questions and answers sheet (DBPR Form 33-032),
• Drafting a claim of lien, satisfaction of lien and notice of commencement form,
• Determining the timing, method and form of giving notice of meetings,
• Determining the vote necessary for certain actions which would entail interpretation of certain statutes and rules,
• Answering a community association’s questions about the application of law to a matter being considered or advising a community association that a course of action may not be authorized by law, rule or the association’s governing documents,
• Drafting amendments to the association’s governing documents,
• Preparing, reviewing, drafting and/or substantial involvement in the preparation/execution of contracts, including construction contracts, management contracts, cable television contracts, etc., and
• Any activity which requires statutory or case law analysis to reach a legal conclusion.
Those activities that may or may not be considered UPL and fall into a gray area depending on the specific factual circumstances are:
• Modification of limited proxy forms created by the state or drafting a limited proxy form – Modifying the limited proxy form to include the name of the association or to certain “yes” or “no” voting questions would not be considered the unlicensed practice of law; however, modifications which are more than ministerial in nature require the assistance of an attorney (i.e.: drafting questions which requires discretion in the phrasing or involves the interpretation of statute or legal documents).
• Drafting documents required to exercise the community association’s right of approval or right of first refusal on the sale or lease of a property – A community association manager may prepare these documents but cannot advise the association as to the legal consequences of taking a certain course of action, which can only be performed by an attorney.
• Determining the number of days to provide statutory notice – If this requires the interpretation of statutes, administrative rules, an association’s governing documents or the rules of civil procedure, then it must be done by an attorney; otherwise, it may be performed by a community association manager.
• Determining the affirmative votes needed to pass a proposition or amendment or the owners’ votes needed to establish a quorum– If this requires the interpretation and application of statutes and an association’s governing documents, then it must be done by an attorney; otherwise, it may be performed by a community association manager.
• Identifying, through review of title instruments, the owners to receive pre-lien letters – The community association manager may make a list of all records owners, however, the community association manager cannot then use the list to determine who needs to receive a pre-lien letter.