By: Laurie F. Masotto, Esq. (originally published in 2000)
Readers may recall a prior article in our newsletter which outlined those records to which members are entitled to inspect, which are very limited, such as board or annual meeting minutes, financial statements, and the like, as compared to the directors’ nearly unfettered right to review all association records (excluding other owners’ ballots or proxies.) A recent case, Smith v. Laguna Sur Villas Community Association, affirms this with respect to legal bills sent to the Association by its attorney.
In that case, the court found that such bills are protected by the attorney-client privilege (the board of directors of the corporation constituting the “client” ), and that such are not appropriate for review by the members of the association. This is because the bills contain subject matters pertaining to the legal dispute, and thus cannot be disclosed to members, even where the members claim the board allowed a “runaway expenditures” for the legal matter in question.