Tuesday, February 20, 2018

Q&A: Handling a Homeowner Request to Review Counsel’s Invoices


Q:        A resident is demanding copies of attorney invoices, but aren’t these subject to the attorney-client privilege? 

A:        The simple answer is: it depends. While “it depends” is not the most satisfyingly complete answer, owners generally have a right to see our invoices. However, when an invoice pertains to or contains attorney-client privileged information, your counsel should review them and redact any part of the privileged narrative.  Examples of attorney-client privileged information that would have to be redacted include entries related to individual privacy, pending or anticipated litigation, contract negotiations, the employment, promotion, discipline or dismissal of a specific officer or employee of the association, or any other matters falling within the attorney-client privilege, to the extent that confidentiality is require in order for the attorney to exercise his ethical duties as a lawyer.

Generally, we would advise our community associations to inform an owner requesting access to the association’s counsel’s invoices that if they wish to review the content of legal invoices, rather than just the amounts billed, they must first be reviewed by counsel, so that any entries which are protected by the attorney-client privilege can be redacted. While that work is not a significant undertaking, the association should not make the determination as to what is or what is not subject to the attorney client privilege or attempt to undertake the redaction on their own without the advice of counsel. An entry as innocent as “discussed contract negotiations with the Board and landscaping contractor” may be an attorney-client protected communication.

The cost to review and redact the invoices should be charged to the requesting unit owner and not as a common expense to all unit owners. While owners may argue that you are attempting to prevent them from seeing the invoices, this is not the case at all. Owners are permitted to see the amount of each invoice, but they are not permitted to review narrative entries which contain attorney-client privileged communications.

Finally, while an owner may argue that they “pay our bill” or that they are our client and therefore have the right to see the narrative entries on our invoices, the individual unit owners are not our clients. Yes, the unit owners pay the common expenses fees, which fund the association’s legal expense, but our client is the corporate entity which acts through its governing board.  

If your governing board receives a request to review the association’s attorney’s invoices, we recommend that you first consult with and seek the advice of your counsel before providing copies to a unit owner.