California broadly defines the

“practice of law”

as dispensing legal advice or service, even if the advice or service does not relate to any matter pending before a court. (Mickel v. Murphy (1957) 147 Cal.App.2d 718, 721.)

Supreme Court of Florida
Supreme Court of Florida

Advising boards how the statutes pertain to them or what actions would violate the law or the governing documents. (See Supreme Court opinion.)

1.  Advising boards about rights, duties and liabilities. That includes but is not limited to:

  • Interpreting the Davis-Stirling Act,
  • Interpretation of contract provisions,
  • Disputed maintenance and repair issues,
  • Settlement issues.

2. Preparing documents that alter rights, duties and liabilities. Managers and management companies can prepare documents that are incidental to the regular course of their business. Anything beyond that must be prepared by legal counsel. That includes but is not limited to:

  • Amendments to CC&Rs, Bylaws, and Articles of Incorporation,
  • Contracts and contract provisions,
  • Election rules,
  • Rules enforcement policies,
  • Settlement agreements, and
florida.oral.argument
Oral Argument before Florida Supreme Court

Violation of the BJR.

The hourly rates for HOA lawyers typically range from $175 to $350, whereas legal advice from a manager is free. It is understandable that boards would try to save money by seeking free legal counsel from their managers. However, doing so exposes directors to significant risk. By statute, directors are protected from personal liability for errors in judgment if they follow the Business Judgment Rule, which requires that decisions by directors be:

  1. In good faith,
  2. In a manner which the director believes to be in the best interests of the corporation, and
  3. With such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. (Corp. Code §7231(c).)

If a board relies on legal counsel from a manager and things go awry, directors will have difficulty convincing a jury that seeking legal advice from a manager was prudent.     Davis Stirling.com

Manual Prosecutors - 30 Pages

Los Angeles County Bar Assoc. – lacba.org

§6411 It is unlawful for any person engaged in the business or acting in the capacity of a legal document assistant or unlawful detainer assistant to do any of the following:

(d) Provide assistance or advice which constitutes the unlawful practice of law pursuant to Section 6125, 6126, or 6127.

(e) Engage in the unauthorized practice of law, including, but not limited to, giving any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms, or strategies.

ARTICLE 7. Unlawful Practice of Law [6125 – 6133]

Legal advice refers to the written or oral counsel about a legal matter that would affect the rights and responsibilities of the person receiving the advice. In addition, actual legal advice requires careful analysis of the law as it applies to a person’s specific situation – as opposed to speculation based on generic facts.

From a legal standpoint, the giving of legal advice is tantamount to the practice of law,

In a nutshell, legal advice has the following characteristics:

  • Requires legal knowledge, skill, education and judgment
  • Applies specific law to a particular set of circumstances
  • Affects someone’s legal rights or responsibilities
  • Creates rights and responsibilities in the advice-giver

Unlike legal information – such as information posted on a street sign – legal advice proposes a specific course of action a client should take. For instance, it’s the difference between telling someone what to do (legal advice) as opposed to how to do it (legal information).

Examples:

  • Selecting, drafting, or completing legal documents or agreements that affect the legal rights of a person
  • Negotiating legal rights or responsibilities on behalf of a person
  • Speculating an outcome
  • Selecting or filling out specific forms on behalf of a client

– See more at: hirealawyer.findlaw.com/

 

12 page booklet from CA Courts Legal Advice vs Legal Information

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