The attorney-client relationship protects communications between lawyers and their clients from disclosure. Attorney-client privilege exists so that clients and their lawyers can speak openly and honestly about issues that the client faces. In a lawsuit the privilege is important because it protects clients from disclosing information that could be potentially damaging.
In the context of a community association, the question is: who is protected by the privilege? It is important to understand who is protected because only a client that has the privilege can waive it. Without even intending to do so, a board member could disclose certain information to an owner and, at that point, the information is no-longer protected.
Two situations in which Boards might face a problem with attorney-client privilege is: disclosure of confidential information to a former board member and issues arising out of communications with a property manager.
Consider the following scenario, Board member Smith is on the board for five years. During the five years, the board consults with the association attorney regarding a seriously past-due owner. The attorney gives the board legal advice and the board commences a foreclosure based on the advice. The foreclosure takes years and is very contentious. During the foreclosure, Smith resigns his post for health reasons. Smith is still a close friend to many of the remaining and new board members.
The current board members frequently update Smith about the ongoing litigation, including disclosing details of conversations between Smith and the association attorney, including advice that the attorney gave regarding the board’s true intentions of pursuing the delinquent owner more harshly than other owners because the delinquent owner is a Baltimore Ravens fan.
The board has destroyed the attorney-client privilege by telling Smith about their conversations with the attorney. Now Smith can be made to testify regarding what the board members told him, including the real reason why the board is pursuing the delinquent owner.