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Wishing and Hoping Won’t Make It So: Colyear II and its Impacts on Older Planned Communities

Mary M. Howell, Esq., CCAL

Of Counsel

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Practices: Community Association Counsel | Commercial CID | Senior & Fair Housing

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Last year gave us an interesting case in the form of the second Colyear case, Colyear v. Rolling Hills Comm. Ass’n. of Rancho Palos Verdes (2024) 100 Cal.App.5th 110.  And this one resulted in a major loss to the Association—rejecting the association’s attempt to enforce a tree-trimming covenant and the resultant $1.3 million dollars in attorneys fees awarded to the prevailing homeowner. The interesting part of the case, though, is what is has to say on the limits of a developer’s ability to create a ‘master planned community,’ and the disastrous effects of careless drafting in the annexation process.

In a nutshell, until around 1980, developers seeking to subdivide and sell a large, planned community generally recorded an initial declaration of CC&Rs, describing some (or all, in some cases) of the property envisioned to constitute the future, built-out community.  Then, new tracts were made subject to a second set of CC&Rs, which might or might not incorporate by reference the original declaration.  Today, the developer generally records a “Master Declaration,” which (1) identifies all the property which may become subject to the Master Declaration in the future, and (2) provides for the “annexation” of portions of that property, over time, to the Master Declaration (along with possible additional restrictions tailored to the newer properties), thus assuring that the Master Declaration governs the added tracts.  But, Rolling Hills Community Association (“Rolling Hills”) was created in the mid-1930s, and therein lies the root of the problem.

When the developer began construction in 1936 it recorded a declaration of restrictions (“Declaration 150” [Original Declaration”]) which contained, amongst other provisions, a tree-trimming requirement.  This Original Declaration also provided that other tracts would be subject to the provisions of “a Declaration of Restrictions” [emphasis added].   The Original Declaration did NOT state that the annexed properties would be subject to the Original Declaration.  Neither did the Original Declaration provide the legal description of properties which were to be annexed. Some of the annexed tracts did have a tree-trimming covenant, some (including Colyear’s) did NOT contain such a covenant.  To further confuse matters, some of the annexation declarations WITH the covenant were recorded after a series of annexation declarations that did NOT contain the covenant.

The Association grappled with the inconsistencies between the Original Declaration, and the various declarations of the annexed tracts, for 60 years.  It was generally apparent that entirety of the Original Declaration (including the tree-trimming covenant) might not be enforceable against some, but not all, the annexed tracts.   First, the Original Declaration did not identify those tracts as subject to its terms, and second, some of the declarations of annexation did not specifically “incorporate by reference” all the terms and conditions in the Original Declaration.  There were tantalizing references in the Original Declaration suggesting it was intended to be the kind of “master declaration” we see today, such as describing the document as “a General Plan” for development of Rolling Hills, and a statement that the Association had the power to enforce provisions of those subsequent tracts’ CC&Rs, but the Original Declaration  did not expressly identify Colyear’s tract, nor did Colyear’s declaration expressly incorporate by reference the Original Declaration.  And that meant the tree trimming covenant could not be enforced against Colyear’s lot.

The Association tried to argue that Colyear must have known about the Original Declaration, since his declaration referred to the Original Declaration (“constructive notice.”)  The Court was having none of it.   First, Colyear’s title report did not list the Original Declaration as binding his lot.   And, although Colyear’s declaration mentioned the Original Declaration, it did not “expressly incorporate by reference the restrictions found in the [Original Declaration.]”  Other annexed tracts DID expressly incorporate by reference the provisions of the Original Declaration, just not Colyear’s tract CC&Rs.  This in turn meant the portions of the Original Declaration enforceable against the various tracts changed depending on the exact language of the annexation declarations.  The appellate court quoted the trial court with approval:  “…To the extent a crazy quilt exists, it is a byproduct of the method by which [the developer] and [the Association] expanded this community.’  Ibid. at 124.

What should the Association have done to make the tree-trimming covenant effective against Colyear’s lot, avoiding the “crazy quilt” situation where some lots are covered by particular provisions, and others are not?  It could have sought either to amend the Original Declaration to specifically add the additional lots, or to amend Colyear’s tract declaration to incorporate the tree trimming language from the Original Declaration.  The record indicates the association considered doing this, until it concluded such an amendment was not likely to pass, or at least, not without considerable effort and cost.  What the association DID do was to issue several “resolutions” addressing the issue, some of which simply asserted the tree-trimming provision DID apply to the annexed tracts, despite a well-documented record of internal ‘back and forth’ on whether the Original Declaration’s tree trimming covenant did apply to the annexed tract.  As the court noted, however, a resolution is not a CC&R amendment.


Takeaways?

        • If your association was built before 1980 or so, and includes tracts annexed after the original declaration was recorded, look over the annexation declarations to make sure that all relevant covenants (for example, architectural covenants, noise control, view protections) are either spelled out explicitly in all tracts, or incorporated by reference—specifically—restrictions set forth in other declarations.
        • Before enforcing a covenant against an owner in an annexed tract, make sure the covenant you seek to enforce unquestionably applies to the lot in question. It’s helpful to look over a title report for a lot in the tract in question, if an owner is willing to share it.
        • If you have doubts after reviewing the governing documents as to the applicability of the covenant in question, consider whether to attempt a CC&R amendment, to avoid the “crazy quilt” result in the Colyear case.
        • It’s unlikely that adopting a rule requiring tree trimming on all lots would have sufficed in this case, because of the differences in the CC&R language in the various tracts. As we know, a rule must be consistent with the CC&Rs.  And while a rule might flesh out vague maintenance guidelines (and thus be appropriate), given the notoriety of these inconsistencies in the Rancho Palos Verdes community, an owner in one of the tracts without such a requirement could easily argue that had the developer intended to encumber HIS lot with such a restriction, it could easily have done so, but did not—an inference that the developer intended NO tree trimming covenant.

When In Doubt, Check It Out: Homeowners’ Rights to Inspect Association Records

Victoria R. Minor, Esq.

Attorney

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Practices: Community Association Counsel 

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In California, homeowners and members of homeowners associations (HOAs) have specific rights to inspect and copy association records. These rights are established under various sections of the California Civil Code and the California Corporations Code.

Under California Civil Code Section 5205, association records must be made available for inspection and copying by any member or their designated representative.  The records should be accessible at the association’s business office or another agreed-upon location within the common interest development.  If no agreement is reached, the association can deliver copies of the records to the member. Cal. Civ. Code §5205.

However, like many things in life, the inspection of records comes at a cost.  The association may charge for the direct and actual costs of copying and mailing the documents, and for the time involved in redacting certain information, up to specified limits (an amount not in excess of ten dollars ($10) per hour, and not to exceed two hundred dollars ($200) total per written request).  Cal. Civ. Code §5205(g).

 

What Records Can Be Inspected?

Members have the right to inspect records for the current fiscal year and the previous two fiscal years. Cal. Civ. Code §5210(a)(1).  Minutes of member and board meetings are permanently subject to inspection. Cal. Civ. Code §5210(a)(2).

Members also have the right to inspect and copy membership lists so long as a written demand is made upon the association to do so.  Cal Corp Code § 8330.  Membership lists are records maintained by the association which include names, property addresses, mailing addresses, and email addresses of members that have not opted out of providing such information.  Cal. Civ. Code §5200(a)(9).  Once the written demand to inspect the membership list has been made, the association then has five business days to make the membership list available for inspection and copying.  Cal Corp. Code § 8330. 

However, certain information may be withheld or redacted by the association. This includes information likely to lead to identity theft or fraud, privileged information, and records that compromise individual privacy. Cal. Civ. Code §5215.  Rather than providing a requesting member a copy of the membership list, Corporations Code Section 8330(c) allows the association to provide the requesting member an alternative method of contacting other members.  Additionally, the use of association records for commercial purposes or any purpose not related to a member’s interest is prohibited. Cal. Civ. Code §5230.

 

What If The Association Withholds Access To Records?

If an association unreasonably withholds access to records, the member can bring an action to enforce their rights.  Courts may award reasonable costs and expenses, including reasonable attorney’s fees to the member, and may impose a civil penalty of up to $500 for each denied request.  Cal. Civ. Code §5235(a).

 

Conclusion  

In summary, California law provides robust rights for homeowners to inspect and copy HOA records, with specific provisions to ensure transparency while protecting sensitive information. These rights are enforceable through legal action if necessary, ensuring that members can access the information they need while maintaining privacy and security.

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Understanding the Fees and Costs of Superior Court Litigation

Joseph A. Sammartino, Esq.

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Practices: Community Association Counsel | Construction Defect Litigation | Civil Litigation | Appellate Litigation

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When a community association ends up in court, it can be a costly process. Sometimes community associations go to court to protect their rights and the rights of the community. Examples of these lawsuits are typically to enforce the governing documents or to enforce other contractual rights. Other times, community associations are brought into court because they have been sued. Regardless of the merits of the case and regardless of which side of a case the community association is on (plaintiff or defendant), fees and costs can add up very quickly.

The Process of Litigation


Litigation refers to the process of taking legal action in court. When a community association files a lawsuit, it is essentially asking the court to enforce a rule or decision a homeowner has violated. This can include things like unpaid dues, violations of the CC&Rs (such as illegal modifications to property or nuisances), or failure to follow community guidelines.


Litigation typically starts when the community association files a complaint in Superior Court, the court that handles major civil cases in California. Before going to court, the community association usually sends notices or warnings to the homeowner, letting them know that they are violating the rules. If a community association (or member) intends to file a lawsuit solely for declaratory or injunctive relief (asking the court to decide the rights and duties of the parties and/or seeking an injunction to compel the defendant to do, or refrain from doing, something) the potential plaintiff must first offer formal Alternative Dispute Resolution (“ADR”) which typically takes the form of mediation. If the homeowner doesn’t comply (or refuses to participate in ADR), the community association may move forward with a lawsuit.

Costs Involved in Litigation


There are several categories of costs involved when an association decides to pursue litigation. These can include:

Court Fees: To start a lawsuit in Superior Court, the plaintiff must pay a filing fee. This fee varies depending on the type of case and the amount of money involved, but Superior Court cases are typically around $500 or a little more. Each defendant in the case will owe a similar amount of money to the court as a first appearance fee. After the first appearance, each filing with the court – briefs, case management statements, ex parte applications, by way of a few of the more common examples – will have a filing fee, ranging from $20 to $100 or more.

Attorneys’ Fees: Probably the single biggest cost for a community association involved in litigation will be attorneys’ fees. Whether or the plaintiff or defense side of a case, a community association will probably need to retain a lawyer to represent it in court; the exceptions are small claims cases (attorneys are not allowed) and cases in which the community association is being sued and insurance defense counsel is provided by its insurance company. The lawyers’ job includes preparing documents, attending court hearings, propounding and responding to written discovery, taking depositions, attending mediation, negotiating settlements, and making legal arguments on behalf of the community association. Attorneys typically charge by the hour, and hourly rates depend on the lawyer’s experience, the complexity of the case, and the location where the association is located. In California, attorneys typically charge between $400 and $500 per hour or more.

While litigation can be expensive, under the Davis-Stirling Common Interest Development Act, in lawsuits involving the enforcement of governing documents, the winning party may recover its attorneys’ fees. If the community association wins a case against an owner to force compliance with a rule, the community association can ask the court for its legal fees. On the flip side, if the owner wins, they may be able to recover their legal fees from the community association. Attorney’s fees incurred in Alternative Dispute Resolution (“ADR”) can be included in the fees awarded even though it is typically before a lawsuit is formally filed.

In lawsuits that do not involve the enforcement of the governing documents, the general rule is that each side pays its own attorneys’ fees. There are a few exceptions to this rule, including breach of contract lawsuits in which the contract has an attorneys’ fees provision. Another exception are causes of action that have a specific right to attorneys’ fees under California law, such as some employment claims and bad faith lawsuits against insurance companies. The possibility of recovering – or not recovering – attorneys’ fees under is an important factor for parties to consider. It provides an incentive for owners to follow the rules, as they could end up paying the community association’s legal fees, as well as their own. It also gives community associations the ability to recover some of their costs if they need to go to court to enforce the rules. Owners should be aware that they could be held responsible for paying legal fees if they are found to be in the wrong. This can be a very significant financial burden, so it is important all parties understand their rights and responsibilities under the law.

Discovery Costs: Discovery is the process whereby both parties investigate the case as completely as possible on their own, and also request and exchange information from each other before trial. This is done by asking written questions that are answered under penalty of perjury, requesting documents, taking depositions (questions asked orally that are answered under oath), and investigating and gathering evidence. Discovery can be a time-consuming and expensive part of litigation, especially if there are a lot of documents to review or witnesses to interview. The community association may also need to hire experts or investigators to assist with the case, adding to the overall cost.

Other Related Expenses: In addition to filing fees, there likely will be other costs, such as charges for having subpoenas served on third parties, copying costs for records that are produced, and documents served personally on other parties. There also will be court reporter fees both for court hearings and for depositions. These costs quickly add up, especially if the case is lengthy or complicated.

Appeals: If either party is unhappy with the court or jury’s decision, they may appeal. Appeals can be costly because they involve additional legal work, including preparing legal briefs and attending appellate court hearings.

Considerations Before Litigating


Because of the potential costs involved, community associations should carefully consider whether litigation is the best option. Pursuing a court action should typically be a last resort after most, if not all, other attempts to resolve the issue have failed, including sending letters, holding hearings, Internal Dispute Resolution (“IDR”) and ADR. If a dispute does go to court, even if the community association wins, the process can still be expensive and time-consuming, even if attorneys’ fees are recoverable. Lawsuits can be divisive within community associations because the parties live (owners) and work (management) near each other. Additionally, witnesses and others who may become tangentially involved may feel unintended awkwardness or pressures.

It is not feasible to predict with any certainty how much a lawsuit will cost because it depends largely on how the other side prosecutes (or defends) the lawsuit. Some litigants and their attorneys can be very aggressive and run up costs.

Conclusion


Litigating in Superior Court can be a costly process for community associations. Some of that cost may be offset through the possible recovery of attorneys’ fees. To minimize costs, both community associations and owners should carefully weigh the costs and benefits of pursuing litigation and explore all options for resolving disputes before going to court. By understanding the costs and fees as well as the process involved, everyone can make more-informed decisions about how to handle disputes in their communities.

The Right to be Heard: A Timely Reminder of Civil Code Section 4515

Karyn A. Larko, Esq.

Senior Attorney 

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Practices: Community Association Counsel 

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On January 1, 2023, amended California Civil Code section 4515 went into effect. The intent of section 4515 is to ensure that owners and residents of common interest developments can peacefully assemble within the community and freely communicate with others regarding matters related to the association and common interest development living, as well as other social, political, and educational purposes (“Matters of Public Interest”).

Specifically, section 4515 gives members and residents of an association the following rights:

        • The right to peacefully assemble or meet with other members, residents, and invitees or guests to discuss during reasonable hours and in a reasonable manner Matters of Public Interest, including matters relating to common interest development living, association elections, legislation, election to public office, or the initiative, referendum, or recall processes;
        • The right to invite public officials, candidates for public office, and representatives of homeowner organizations to meet with members, residents, and their invitees or guests, and speak on Matters of Public Interest;
        • The right to use the common area, including any meeting room or clubhouse when available, or, with the consent of the owner, the owner’s lot or unit, for an assembly or meeting related to Matters of Public Interest. Of note, an association cannot require members and residents to pay a fee, make a deposit, obtain liability insurance, or pay the premium or deductible on the association’s insurance policy in exchange for being able to use the common area for the assemblies and meetings listed in items 1 through 3 of this article;
        • The right to canvass and petition the members, the residents and board members regarding Matters of Public Interest, at reasonable hours and in a reasonable manner;
        • The right to distribute or circulate, without association permission, information on Matters of Public Interest at reasonable hours and in a reasonable manner; and
        • The right to use social media or other online resources to discuss any Matters of Public Interest even if the content is critical of the association or its governance.

Civil Code section 4515 does not require an association to allow members and residents to display signs, posters, banners, or flags in the common area, or use the association’s website to express their opinions on Matters of Public Interest. Nor does this law require an association to provide members and residents with social media or other online platforms where they can express their opinions on Matters of Public Interest.

It is important to note that if an association’s governing documents attempt to prohibit members and residents from exercising their rights under Civil Code section 4515, or if an association otherwise attempts to hinder members and residents from exercising these rights, the association could face liability, including a civil penalty of up to $500 for each violation.

 

PRACTICE TIPS:

        • Establish a system for reserving the clubhouse, meeting room or other areas suitable for meetings, and keep track of when these areas are reserved so you can promptly respond to requests to use these areas.
        • If the association generally requires members and residents to pay a fee, pay a deposit or obtain liability insurance to reserve the use of common area, include on the reservation form an area for the reserving party to identify the planned use of the common area, so you know whether these requirements must be waived.
        • Never retaliate against a member or resident for exercising their rights under Civil Code section 4515, even if they were unfairly critical of the board or management.

 

 

New Year, New HOA Resolutions!

Jon H. Epsten, Esq., CCAL

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858.527.0111
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Practices: Community Association Counsel | Construction & Remediation | Construction Defect Litigation | Civil Litigation | Commercial CID

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Kickstart the year with new goals and planning for a successful community management.

At our annual firm Legal Symposium, I was asked by a board member “what they could do differently in 2025 to make their life as a board member just a little easier?” So, I decided to place the answer to her question in the form of New Year’s resolutions. Get started early in the year with these Resolutions and hopefully 2025 will be a better year for both you and your association.

 

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Updates on The Corporate Transparency Act as of 12/27/2024

 

*This article is an update to the previous versions:

FIFTH CIRCUIT COURT OF APPEALS REINSTATES NATIONWIDE PRELIMINARY INJUNCTION OF THE CORPORATE TRANSPARENCY ACT

On December 26, 2024, the full panel of the Fifth Circuit Court of Appeals (“Fifth Circuit”) vacated the December 23, 2024 decision by a three judge panel to stay the preliminary nationwide injunction against the Corporate Transparency Act (“Act”) created by the December 3, 2024 ruling in Texas Top Cop Shop, Inc., et al. v. Garland, et al.  The Fifth Circuit Court of Appeals court order can be read here. Please note this order simply reinstates the initial preliminary injunction and is still not a final ruling on the Act’s constitutionality.

At present, the Fifth Circuit’s order means the reporting requirements for applicable community associations are currently “on hold” and applicable community associations are not currently required to meet the January deadlines for filing.

The Fifth Circuit is expediting the government’s appeal and additional developments are imminent.  Our office will continue to provide updates as they arise.  However, community association boards should continue to closely monitor the developments and remain prepared to meet applicable filing deadlines if the filing requirements are reinstated.

For additional information and updates on the Texas Top Cop Shop case appeal and its applicability to the Act visit www.caionline.org/CTA.

Updates on The Corporate Transparency Act as of 12/24/2024

 

 

By Kieran J. Purcell, Esq.

 

*This article is an update to the previous versions:

BOI REPORTING DEADLINE EXTENDED BY FINCEN

On December 23, 2024, the Fifth Circuit Court of Appeals granted a stay over the preliminary nationwide injunction against the Corporate Transparency Act (Act) created by the December 3, 2024 decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al. The Fifth Circuit Court of Appeals also issued an order reinstating the January 1, 2025 beneficial ownership information (“BOI”) reporting deadline.

On December 24, 2024, the Financial Crimes Enforcement Network (FINCEN) extended reporting deadlines. Notably, FINCEN extended the reporting deadline for reporting companies created or registered to do business before January 1, 2024. These companies have until January 13, 2025, to file their initial BOI reports.

FINCEN also extended other BOI reporting deadlines. Information about these additional extensions can be found at https://www.fincen.gov/boi.

The Fifth Circuit Court of Appeals court order can be read here. Please note this order just stays the initial preliminary injunction and is still not a final ruling on the Act’s constitutionality. To that end, the Fifth Circuit’s order directed the appeal in this lawsuit be expedited to the next available oral argument panel.

CAI continues to track federal courts for challenges of the Act and is in contact with the United States Department of Treasury about the Act. For additional information and updates on the applicability to the Act visit www.caionline.org/CTA.

Updates on The Corporate Transparency Act as of 12/23/2024

 

 

By Kieran J. Purcell, Esq.

 

*This article is an update to the previous versions:

FIFTH CIRCUIT COURT OF APPEALS STAYS PRELIMINARY INJUNCTION OF THE CORPORATE TRANSPARENCY ACT

On December 23, 2024, the Fifth Circuit Court of Appeals granted a stay over the preliminary nationwide injunction against the Corporate Transparency Act (Act) created by the December 3, 2024 decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al. The Fifth Circuit Court of Appeals also issued an order reinstating the January 1, 2025 beneficial ownership information (“BOI”) reporting deadline.

The Fifth Circuit Court of Appeals court order can be read here. Please note this order just stays the initial preliminary injunction and is still not a final ruling on the Act’s constitutionality. To that end, the Fifth Circuit’s order directed the appeal in this lawsuit be expedited to the next available oral argument panel.

At present, the Fifth Circuit’s order means all reporting companies created or registered to do business before January 1, 2024, have until January 1, 2025, to file their initial BOI reports.

CAI continues to track federal courts challenges of the Act and is in contact with the United States Department of Treasury urging an administrative delay be issued due to the chaos and confusion created by these recent court rulings, Congress’s decision not to take legislative action to extend the filing deadline, and the end of year holidays.

For additional information and updates on the Texas Top Cop Shop case appeal and its applicability to the Act visit www.caionline.org/CTA.

Updates on The Corporate Transparency Act as of 12/18/2024

 

 

 

By Kieran J. Purcell, Esq.

 

*This article is an update to the previous versions:

U.S. DISTRICT COURT DENIES GOVERNMENT’S MOTION TO STAY PRELIMINARY INJUNCTION OF THE CORPORATE TRANSPARENCY ACT

On December 17, 2024, the U.S. District Court for the Eastern District of Texas denied the Government’s Motion to Stay Preliminary Injunction Pending Appeal of the December 3, 2024 decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al. which imposed a preliminary nationwide injunction against the Corporate Transparency Act (Act).

In making its decision, the Court noted when Congress enacted the Act almost five years ago, the Act had no implementation date, so there is no compelling need to lift the stay, especially where the Court has found the statute to likely be unconstitutional.

The Court also cited FinCEN’s recent website alert announcing a stay on the January 1, 2025, beneficial ownership information (“BOI”) reporting deadline pending determination of the appeal. Due to the widespread media coverage of FINCEN’s alert, the Court concluded lifting the stay would add to, not alleviate, public confusion about the Act.

In conclusion, the Court’s decision means the December 3, 2024 injunction remains in effect until the Fifth Circuit Court of Appeal rules otherwise. However, it is important to remember the order is still a preliminary injunction only. While it temporarily pauses enforcement of the Act on a nationwide basis, enforcement could resume if the injunction is later reversed.

For additional information and updates on the Texas Top Cop Shop case appeal and its applicability to the Act visit www.caionline.org/CTA.

 

You’ve Been Served – An Article to Supplement Epsten, APC’s Litigation Checklist

Hannah I. Hughes, Esq.

Attorney

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Practice: Civil Litigation

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“You’ve been served” are three little words that no one wants to hear. But what exactly does that mean and what should you do when you are served with a lawsuit?

Our firm has created a checklist for when you have been served with a lawsuit, which can be located here: https://www.epsten.com/youve-been-served-lawsuits-checklist/. This article is intended to serve as a supplemental article to that checklist.

If you are served with a lawsuit, it is important to note the time, date, and method of how the lawsuit was served on you. It is important to immediately provide this information to your legal counsel, along with copies of all documents that were served on you, so that they can determine first whether service was proper and second when a response to the lawsuit is due. For example, documents served in-person have a thirty (30) day deadline to file a response while documents served via mail will provide you with an additional two (2) days to respond. If the Association does not respond by the deadline, they may not be able to protect their interests in the lawsuit.

Once you have provided your legal counsel with a copy of the documents and a detailed explanation of the date, time, and method of service, you should also provide the same to your insurance carrier. Your insurance carrier is the only one that can determine whether there is insurance coverage for the claim. Among the benefits of tendering the lawsuit to your insurance carrier is that they could accept the claim and provide defense counsel for the Association. This means that the association’s legal fees and costs would be covered by your insurance carrier.

After providing your legal counsel and your insurance carrier with a copy of the documents that you were served with, along with a detailed explanation of the date, time, and method of service, it is important that you preserve potential evidence related to the lawsuit. The Board of Directors, the Community Association Manager, and any and all employees have a duty to preserve related evidence once a lawsuit is filed. This means that you cannot delete, remove, or otherwise destroy related evidence including, but not limited to, emails, Board Meeting Minutes, Invoices, letters, photographs, video, etc. Your attorney likely will send a letter to notify affected parties of their duty to preserve evidence.

In addition to preserving potential evidence, you must also preserve the attorney-client privilege. The attorney-client privilege serves to protect client communication to or from their attorney. This includes oral or written communications whether in person, over the phone, or via email. However, the privilege only applies if it is a communication to or from your attorney. That means you should not forward any emails, documents, or other correspondence from your attorney to anyone who is not the Community Association Manager or a member of the Board of Directors. Additionally, you should not discuss the case with anyone who is not a member of the Board of Directors or your Community Association Manager. Remember, the client holds the privilege; this means the client can waive that privilege by sharing information with a third party. It is important that you do not waive this privilege by including a third party who is not subject to the privilege.

Finally, some owners within the association may request notice or information regarding the lawsuit so that they can determine whether they need to inform or notify any potential buyers or other third parties. Although the association is not required to provide this information, your attorneys can prepare a letter to the membership regarding the litigation that is informative but does not waive the attorney-client privilege.

While the three little words “you’ve been served” may not be as sweet as “I love you”, they should be taken just as seriously. Be sure to utilize the checklist we have provided to assist you if you ever hear those three little words.