Question: Our own-your-own-apartment building underwent a condominium conversion. (Own-your-own apartments preceded the condo movement.) Each owner received a separate retainer agreement from the attorney that contained a clause saying the civil engineer preparing the plan took his measurements from existing records and would not be visiting the project or remeasuring.
Before the conversion, eight owners had garages and the remaining 17 had carports. The attorney was responsible for drafting and recording the covenants, conditions and restrictions (CC&Rs;). After conversion, we learned the attorney changed the private garage ownership to “common garages shared by all owners.” We demanded the attorney correct this. He said he’s only responsible for drawing up the documents, and that if we don’t like them we can amend them.
He said that we all knew from the retainer agreement we signed that the engineer was working off recorded plans and that if the plans differed from reality, there was nothing he could do. He won’t give us the name of the civil engineer.
Did we owners have to sign separate retainer agreements, and what can we do about the inaccurate garage recordings?
Answer: Owners may have had to sign separate retainer agreements because the conversion attorney felt it necessary that each owner agreed to be represented, and for other reasons that the attorney did not disclose. However, because each owner initially had differing ownership interests in the project, there could be a conflict of interest in having the same attorney represent everyone.
If the board of directors retained the attorney to represent the association, then the association is his client, not the homeowners. If the attorney required that each owner also be his client, the association’s attorney has created a conflict of interest. If the attorney failed to properly disclose the conflict, and if owners were not advised to seek outside counsel before agreeing to representation, and did not sign waivers, each owner may have a cause of action against the attorney.
Changing the classification of property ownership for some owners but not for others appears to be taking owners’ property without due process.
This situation requires an immediate correction and possibly restitution. Whenever an owner is deprived of property rights without due process, the conflict is considered to be substantial.
Rules and regulations might be used to complement certain CC&Rs; but may not be used to actually change the recorded documents. All changes in governing documents should have been disclosed and made subject to approval by owners before being recorded.
Some laws governing the profession of attorneys, including fee agreements, are located in Business and Professions Code Sections 6000 to 6238.
Under California Professional Responsibility Rule 3-110, an attorney shall not intentionally, recklessly or repeatedly fail to perform legal services with competence. “Competence” in any legal service means diligence, learning and skill, and the mental, emotional and physical ability necessary to perform such service.
Under American Bar Assn. Model Rules of Professional Conduct 1.4(b), the attorney shall explain a matter to the extent necessary to permit the client to make informed decisions regarding representation. Here, the attorney had a duty to recognize and disclose governing-document discrepancies and propose changes in a timely manner.
The attorney is ultimately responsible for supervising individuals he hires and assumes liability for any errors made by the engineer. It is not enough to excuse the engineer’s actions by stating he never came out to the site and that it was disclosed in the agreement.
If the owners had their property rights altered, the attorney may be liable and have to pay damages or correct the altered rights. Each owner can file a separate complaint with the State Bar at www.calbar.ca.gov and may have a separate cause of action against the attorney.
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