Part 2 on Virginia’s Unauthorized Practice of Law Rules and HOAs – What is considered the unauthorized practice of law?
Originally posted 2013-01-08 07:00:01. Republished by Blog Post Promoter
We blogged previously about finding guidance in Virginia’s rules on the unauthorized practice of law as they pertain to community associations. In this post, we will review Virginia opinions that address whether certain work performed by managers is the unauthorized practice of law (“UPL”).
Virginia has only one UPL opinion that pertains specifically to HOAs. UPL Opinion 139 addresses “whether a company providing management services to a condominium association, may prepare and file liens on behalf of the association.” A lien filed for a condominium, pursuant to Va. Code Ann. § 55-79.84, or a lien filed pursuant to Va. Code Ann. § 55-516 for properties subject to the Property Association Act, subjects a lot or unit to a lien of assessment.
According to UPL 139, the act of preparing and filing such a lien of assessment is the practice of law.
One is deemed to be practicing law whenever one, other than as a regular employee acting for his employer, undertakes, with or without compensation, to prepare for another legal instruments of any character . . . . [T]he contractual relationship between a condominium association and a management organization does not constitute the regular employee/employer relationship envisioned by the definition. Furthermore . . . the completion of liens . . . including the drafting of viable legal description of the lot or unit, requires the use and application of legal judgment.
However, UPL 139 does not prohibit an association manager from drafting and filing a release of a lien of assessment. So long as the prepared release is “merely ministerial in nature, requires only the insertion of brief descriptive information, and does not require the application of legal judgment to facts,” a nonlawyer would be permitted to prepare a lien release.
Although UPL Opinion 139 is the only to address common interest communities directly, other UPL opinions address situations that may arise. For example, there are two UPL opinions that deal with non-lawyers completing forms. UPL Opinion 73 states that it is the unauthorized practice of law for a non-lawyer to give assistance in completing forms or render any legal advice concerning the completion of the forms. Although the forms addressed in this UPL opinion included wills, leases, power-of-attorney, and bill of sale, the analysis would likely be similar for the completion of legal forms pertaining to an association. UPL 182 determined that the completion of a form by a non-lawyer was not the unauthorized practice of law because the non-lawyer submitted the completed form to an attorney for review.
Virginia’s Unauthorized Practice Rules (“UPR”) provide further guidance. For example, UPR 9-102 addresses legal issues related to administrative agencies, which would include the regulations of the CICB and Ombudsman. UPR 9-102(A) states, “[a] non-lawyer shall not furnish to another for compensation, direct or indirect, advice or service under circumstances which require his use of legal knowledge or skill in the application of any law, federal, state or local, or administrative regulation or ruling applicable thereto, except as: (1) As an employee to his regular employer. (2) As permitted by the rules of such agency and reasonably within the scope of his practice authorized by such agency.” Similarly, UPR 9-102(B) provides “[a] non-lawyer shall not undertake, with or without compensation, to prepare for another legal instruments of any character incident to his practice before an administrative agency, except: (1) As an employee for his regular employer. (2) In the regular course and reasonably within the scope of his practice authorized by such agency.”
Managers in Virginia are required to be licensed. They have completed years of training including coursework on drafting various documents for associations. The UPL opinions do not pass judgment on whether managers are trained, skilled or competent in drafting documents, but rather take a measured approach by the Virginia Supreme Court to protect all citizens and assure that citizens who believe they are being provided with legal advice are being provided with that advice by lawyers who are licensed in Virginia, subject to all of the requirements and regulations of the Virginia State Bar and the Virginia Supreme Court.
Determination of the unauthorized practice of law requires nuanced analysis. However, if the services you provide are determined to be the unauthorized practice of law, the potential liabilities include (1) a possible misdemeanor charge, (2) liability to the association, especially if you make a mistake, (3) possibility that the claim made by you won’t be covered by any insurance coverage you have, and may not be covered by your management company employer, and (4) possible action by the CICB under manager regulations. Make sure you review your actions with an experienced community association attorney.
Tarley Robinson, PLC, Attorneys and Counsellors at Law