Over the course of a fiscal year, boards of directors will face a variety of legal issues ranging from interpretation of the CC&Rs, compliance with the Davis-Stirling Act, determining liability for water damage, maintenance obligations, rules enforcement, responding to threatened lawsuits, fighting
external issues that may impact the association, and more.
Line Item. As a result, most associations from time to time need knowledgeable legal counsel.To that end, boards need to add a line item in the association's budget for legal expense. The amount allocated, whether $5,000, $10,000, $20,000, $40,000 or more, will depend on the size of the association and the anticipated number of legal issues.
Fluctuating Amount. Unfortunately, legal expenses are not as predictable or as steady as insurance or utility expenses. Associations could go an entire year with no legal expenses and the next year spend $50,000. The more prudent course is to fund the line item each year and hope it will not be needed.
ASSISTANCE: Associations needing legal assistance can
contact us.
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