—Legal in Lincoln
“The association’s board of directors has responsibility for choosing which professionals to hire, and may receive recommendations and qualified candidates from a variety of sources. While the management company may make recommendations, it is up to the board to determine whether that attorney (or accountant, or contractor or engineer) is suitable.
“The attorney should disclose any existing relationship with respect to the property, board members, the management company or any individual unit owners—whether it is a familial, financial or business relationship, or legal representation. An outright ban may not be necessary so long as the attorney discloses his or her interest; the terms of the attorney’s engagement are fair; and the majority of other directors’ vote in favor. The attorney should also reveal to the other interested party that he has taken on this representation.
“Engaging in any transaction with respect to the property under advisement, such as the described acquisition and “flip” may create perceived conflicts by the attorney. The board should be notified by the attorney, so it may make a decision as to whether there are real conflicts, such as use of confidential or privileged information that would require the attorney to step down in its representation of the association.
“Again, the burden is on the attorney to make the situation and relevant facts known to the board. Failure to do so would also provide possible grounds for the attorney to be dismissed. And from a professional perspective, it is obviously best for the attorney to avoid any perceptions of conflict when at all possible.”