Attorney-client privilege is a legal shield that protects the confidentiality of information shared by attorneys and their clients. Only attorneys and their clients are covered by the privilege; third parties standing outside the privilege circle can’t penetrate the shield and gain access to information protected by it. But clients can waive the privilege voluntarily or inadvertently. And it is inadvertent or unknowing waivers that are of most concern to condominium attorneys.

This is a concern we emphasize to condominium board members: You can share privileged information only with people standing under the privilege umbrella – a small group limited to other board members and the association manager. Sharing a privileged communication with just one person outside the umbrella has the same effect as pasting it on a billboard in the middle of a major highway; the privilege evaporates and the information becomes accessible, or potentially accessible, to plaintiffs suing your association, or being sued by it, who may be able to use the information against you.

There are many things you must not do (DON’TS) , and many things you must do, (DO’S) to protect attorney-client privilege.

Don’t assume that all communications with your attorney are privileged. The privilege applies only to communications involving the seeking or giving of legal advice. That said, most attorneys define “advice” broadly to include most of the information they exchange with clients. It is usually best to assume that any discussions with your attorney, notes based on those discussions, and any information exchanged with your attorney are privileged. If the board holds an executive session to discuss current or anticipated litigation, the portion of the minutes describing that discussion should be considered privileged and should not be shared.
Don’t share privileged information with vendors or experts hired by the association. The association’s manager, who has authority to act on the association’s behalf, is considered to be a direct agent of the association and therefore is covered by the privilege. But the engineer your association hires to perform a structural inspection is not the association’s agent and is not covered by the privilege. So, the report the engineer produces detailing structural defects would be subject to discovery by the developer or other parties involved in litigation with you.
Don’t classify all legal documents as “privileged.” Although the board’s covenants, rules and regulations, and financial records might be involved in future litigation, owners are obviously allowed to see them. The transition report, prepared when the developer transfers control of the community to owners, similarly should be accessible to owners. However, a building conditions study that might also be prepared as part of the transition should be handled differently, because it could be used to support the association’s claim in future litigation.
Don’t share emails or updates from your attorney with owners. The updates may be informative and helpful. They may tell owners some things you think they should know. But sharing the updates will destroy the privilege for all the information contained in them. If you want to provide litigation updates to owners, have your attorney draft them.

Let the association’s attorney directly engage any experts who might provide information related to current or future litigation. An expert retained by the attorney is the attorney’s consultant. As a result, communications with the expert and the expert’s reports and notes are all considered part of the attorney’s work product and are protected. If the expert submits a report directly to the association, it would not be protected; if the expert submits the report to the attorney, who in turn shares that information with the board, the privilege would apply.
Have the association’s attorney review all communications with owners about pending or anticipated litigation. Owners have a reasonable right to be informed about matters affecting the association and its finances. But that right must be balanced against the need to protect the association’s legal interests. As a general rule, owners are entitled to know that litigation is pending or has commenced, and they should be privy to any public information related to the litigation. Complaints, motions and documents filed with the court, for example, can be shared with them. But all communications between the board and the association’s attorney – messages providing updates on negotiations, detailing the legal strategy, and the evidence to be presented – all should be protected. If the board holds an informational meeting to inform owners about the litigation, the attorney should attend the meeting and should provide the update to make sure no privileged information is disclosed. The attorney should also attend a general owners’ meeting not called specifically to discuss the litigation to respond to any questions about it.
Recognize that privileged information may be hidden in seemingly innocuous documents. The disclosure form that lenders require condominium buyers to obtain from the association board is a good example. Lenders generally ask more than if there is pending litigation; they also ask for details about the claims, the defenses, and sometimes an assessment of the likelihood of success – information attorneys would never disclose to anyone other than a client. Boards should have the association’s attorney respond to these questions. Our firm has established procedures for dealing with such inquiries. We want to be as cooperative as reasonably possible with owners trying to sell their units, but we also need to protect the association’s interests. For that reason, we will not provide any privileged or potentially privileged information. We also require buyers and sellers to sign a form indemnifying the association, the property management company and the firm from any liability resulting from these disclosures.
Be very careful about handling privileged, or potentially privileged, information. Hitting “reply to all” on a communication from your attorney or forwarding it to others could seriously damage the association’s prospects in current or pending litigation if recipients include anyone who is not covered by the attorney-client privilege. The privilege can be destroyed even if the disclosure is unintended, for example, if an owner sees a privileged document a trustee or a manager has left accidentally on a table in the meeting room. There are legal mechanisms for restoring the privilege for information disclosed inadvertently, but attorneys and their clients also have an obligation to take reasonable steps to protect privileged information, and leaving a document exposed in a public space certainly weakens that argument. It would be like trying to persuade an insurance company after a fire that you were not negligent in leaving a blow torch and matches next to a can of gasoline. The insurer might accept your argument, but you can’t count on it. It is far better to take reasonable, even extraordinary steps to protect attorney-client privilege rather than to risk losing it.

IT’S A PRIVILEGE!

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