Monday, June 18, 2012

Final Order: HOA Management Firm Engaged in Unauthorized Practice of Law

Every state has rules regarding the unauthorized practice of law governing what activities constitute acting like a lawyer.  The certified Legal Document Preparer Board of the Arizona Supreme Court found AAM, LLC, both a CAI and Arizona Association of Community Managers (AACM) member, had engaged in such activities, which are commonly found in many other HOAs and with many other management firms/managers. (In Arizona, it’s Supreme Court Rule 31).

In regard to AAM, many of the State Bar’s Hearing Officer  findings were dismissed and overturned in the Board’s May 24, 2012 Findings of Fact and Conclusions of Law (LDP-NFC –09-L094 and LDP-NFC-10-L026,   not to be found on the State Bar or Supreme Court websites).  The Board found AAM had exceeded its authority as a certified document preparer and violated Rule 31 in that, among other things,
1.  Represented the HOA in violation of Rule 31, including signing and submitting lien documents as such were not incidental to its regular business activities;
2. Submitted documents that it had prepared to third-parties, such as collection letters, and filing court motions and complaints;
3. Represented HOAs in small claims court;
4. Although there existed a contract between AAM and the HOA to act as a representative of the HOA, such a contractual arrangement is subject to Rule 31, which cannot be overridden by private agreements;
5. Offered legal advice when it gave, through newsletter statements, made statements about “possible  legal rights, remedies, defenses, options or strategies;”
6. Through its offers to “coordinate payment plans” debt payment plans, AAM was not giving general information but was offering to negotiate with the HOA on behalf of the homeowner;
7. “Offered to negotiate homeowners” legal rights, remedies, defenses, options or strategies;”

It is interesting to note that former Arizona Supreme Court Chief Justice Zlaket was called as a witness by AAM.  He stated that “the purpose of the certified legal document preparer rules as protection of the public from charlatans who didn’t know what they were doing, from document prepares who were harming customers by preparing the wrong documents.”

 The full, detailed, 55 page Board document can be found at:

Courtesy:  George K. Staropoli

This article is not intended to be specific legal advice. It only provides general legal information. You should consult a licensed attorney if you have a legal issue.

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