The Unholy Alliance Strikes Again

 It has come to our attention that there are law firms that believe that their responsibilities owed to the Community Association client do not cover their disclosure of information concerning their representation of the managing agent. Obviously, the attorney must avoid any actual conflict of interest and when an attorney represents two clients that are potentially adverse to one another, he or she is in a conflict of interest.  It seems to be happening more frequently with the economic impact of foreclosures facing Community Associations. In fact, if the attorney and the management company when sued use the same attorney, that in and of itself presents a potential conflict particularly if the management company is culpable for the claims being brought against the association.

Frequently, the insurance company for the association will hire an attorney to represent both the management company and the association when they are sued in order to save costs, but the insurance company does not necessarily have the best interests of the association in mind as opposed to limiting their expenses and exposure. The failure of the attorney to recommend that the association get independent counsel to evaluate whether in fact the association’s normal corporate counsel or appointed insurance counsel is in a conflict by representing both parties, particularly when the cause of action being brought is against the association because of the failure on the part of the management company to fulfill its contractual and/or legal duties owed to the association, is wrong.  Attorneys do work for management companies for a lot of reasons but most particularly they accept referrals from management companies resulting in potentially hundreds of thousands of dollars of legal fees. The attorney, however, when representing the association owes his or her primary duty to the association and not anyone else.

Frankly, if your association is represented by an attorney, if he and/or she is also representing the management company of your association and/or perhaps others, you should clearly be entitled to know that situation and require the attorney to explain why he or she is not in a conflict of interest.  If your attorney is not willing to disclose or adequately explain that relationship, get another attorney before more potentially adverse proceedings occur.