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April 15, 2014
House and Senate debate various UPL bills

By Gary Blankenship
Senior Editor

Dissatisfaction expressed by community association managers with a proposed advisory opinion from the Bar’s Standing Committee on the Unlicensed Practice of Law has spilled over into the Florida Legislature, now considering bills affecting criminal penalties for UPL.

The Legislature also has bills, supported by community association managers (CAMs), that address laws regulating CAMs and further specifying activities they may carry out.

The Bar has gone on record opposing the bills (HB 7039 and SB 1496) on UPL criminal penalties, which are being pushed by CAMs. The Bar has not taken a position on the bills (HB 7037 and SB 1466) about CAM licensing and regulation.

HB 7039 passed the House Civil Justice Subcommittee and on March 24 was tabled in the House Judiciary Committee. SB 1496 was considered by the Senate Judiciary Committee on March 25, but was tabled until its next meeting.

The bills spell out several actions that will not be considered criminal violations of the law prohibiting UPL if done by nonlawyers, including acting as mediators or arbitrators, working under the supervision of a lawyer, or engaging in pro se representation. But the bills also provide that individuals licensed by the state in other professions cannot be criminally charged for UPL if they are “acting within the lawful scope of practice” of their profession as designated in state law.

That is apparently intended to work in conjunction with HB 7037 and SB 1466, which add specific duties that CAMs may perform and designate forms they can use in carrying out those duties.

Bar Chief Legislative Counsel Steve Metz, testifying at the Senate Judiciary Committee, noted that the bills stem from a proposed advisory opinion the Bar’s Standing Committee on the Unlicensed Practice of Law submitted to the Supreme Court last year.

The opinion attempted to clarify, in response to an inquiry from the Real Property, Probate and Trust Law Section, those activities CAMs could engage in and what matters must be referred to an attorney.

The proposed opinion is still pending before the court, which has the final say. Some of the actions that the opinion found to be UPL are listed in HB 7037 and SB 1466 as permissible activities for CAMs under their professional licenses.

Noting that CAMs are concerned with being arrested, Metz said, “They’re overreaching, though, in this particular bill. The reason is there has never been a community association manager ever, ever prosecuted by the Bar under its civil authority or a state attorney criminally for the unlicensed practice of law.”

The danger, he added, is that by defining UPL so specifically and including an umbrella protection for state licensed professionals, the bills encourages bad actors to hide behind the legislation’s provisions to stave off Bar or criminal prosecution.

The Bar annually receives hundreds of complaints, Metz said, both about nonlawyers pretending to be lawyers and others giving legal advice but claiming they don’t need to be attorneys to do so.

“For the first time, if the bill passes, you’re going to have a state bill that says the following are not the unlicensed practice of law punishable by a third degree felony,” Metz added.

“Can you imagine the bad actors out there who will use that to hide behind? There are real cases, and these are real things that are going to happen if the bill passes.”

But Andrew Fortin, senior vice president of Associa, a community association management company, said the legislation was needed because the proposed opinion pending at the court goes too far.

“They have come in and scooped up a whole bunch of activities that our CAMs do that have been viewed as ministerial,” he said. “Our managers [under the proposed opinion], if they bought an app on their iPhone and the terms of use came up, they would have to run to an attorney.”

Fortin said the UPL Committee failed to find any public harm to justify its opinion. He added that SB 1496 “is based on a simple premise that licensed professionals, when they act in the lawful scope of their professions, it is not unlicensed practice of law, that I can’t be prosecuted for a third degree felony.”

Fortin also criticized the UPL Committee and Bar’s procedures for issuing the opinions on UPL, saying, “That’s attorneys petitioning attorneys to determine what work attorneys will do.”

The Senate Regulated Industries Committee voted 7-1 on March 27 to move an amended version of SB 1466 that Sen. Tom Lee, R-Brandon, said struck a balance between the stakeholders.

“The bill solidifies the duties that may be performed by community association managers,” Lee said. “Specifically, the bill defines the duties of CAMS and adds claims of lien forms and release of lien forms to the condominium, cooperative, and homeowners’ association statutes.”

Lee said the rewrite also adds a pre-lien form to the condominium cooperative and homeowners’ association statutes; a foreclosure form to the HOA statutes; and estoppels certificates to the duties that may be performed by CAMS. It also introduces a “reasonableness standard” when billing for collection service performed by CAMS and corrects some technical deficiencies with the forms being put into statute at the request of the RPPTL Section, he said.

“At this point now, we should have the full support of the community association managers and The Florida Bar,” Lee said. “I think we are in good shape.”

Pete Dunbar, representing the RPPTL Section, said the revised bill “strikes the appropriate balance” on the scope of services CAMS may perform. However, Dunbar said, the section would like to see provisions added to the bill to hold CAMS accountable for any mistakes they make, and that there needs to be fee caps on some services.

“If you are getting a late warning letter, you should not be paying an additional $450 for that. That ought to be capped at some number,” Dunbar said.

“If you have paid your assessments on time . . . and it is time for you to sell your unit, one of the first things the title company is going to ask for is an estoppels letter. To get the information out of the computer and provide it to the closing agent should not be $350. That fee should be capped at some reasonable number.”

Lee said the bill’s next stop is the Senate Judiciary Committee, and he is happy to look at those issues going forward.

“I want to help work out their issues,” Lee said.

The RPPTL has been advancing the same positions it did before the Supreme Court in the UPL case and is considering taking a formal legislative position. The Florida Bar has no formal position on the CAM legislation.

The issues involving community association managers first came to the Standing Committee on the Unlicensed Practice of Law in a 2012 letter from the RPPTL Section. The section wanted clarification of a 1996 Supreme Court UPL opinion on allowable CAM activities, including 14 specific matters.

The committee held a more than two-hour hearing in June 2012 and then several months later issued its proposed opinion, which was filed with the court in May.

In that opinion, the committee found that several of the issues raised by the section were ministerial in nature and hence could be performed by CAMs without raising UPL questions.

Several other issues depended on how complicated the action was, with the committee finding again that simple, ministerial functions and activities that involved straightforward application of law could be carried out by CAMs while those that required interpreting laws or cases required a lawyer. The opinion found activities that affected substantial rights of parties had to be done by attorneys.

On one of the key questions, involving the preparation of a pre-arbitration demand letter for a delinquent homeowner, the committee found that a CAM could prepare such letters. However, the committee also determined that preparation of lien documents and preparation of contracts affecting legal rights, which were complicated and technical legal areas, required a lawyer’s participation with the CAM.

The complete proposed advisory opinion, #2012-2, can be found on the Bar’s website.

[Revised: 11-29-2017]