Can a law firm represent both a condominium developer and the residents' association the developer controls?

Plain-English summary

A firm represented a for-profit developer that built and sold condominium units. It had prepared a declaration of condominium under which each unit purchaser became a member of a non-profit association that governed the condominium's affairs, with the developer retaining the right to elect a majority of the association's directors until about 90% of the units were sold, after which control passed to the owners. The firm also represented the association, and asked whether representing both the developer and the association was proper given the developer's control of the association.

With two members dissenting, the committee concluded there was no immediate conflict of interest in representing both the developer and the association under the circumstances described. It cautioned that representing the majority interests requires that any protections the law affords the minority be observed, and that counsel representing the majority should take particular care to see that, to the extent such protections fall within his professional responsibilities, they are scrupulously observed. The committee added that if the interests of the developer and the association later became antagonistic, cause might arise then for withdrawal from representing either or both parties, a question it did not reach.

Currency note

This opinion was issued in 1969, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. It applied the former Canon 6 on conflicting interests. Concurrent conflicts and the joint representation of multiple clients are now addressed by Rule 4-1.7, and an organization as client by Rule 4-1.13. Treat this page as historical context, not current guidance. Verify against the current rules before relying on any specific requirement mentioned here.

Common questions

Q: Can one firm represent both the condo developer and the owners' association?

A: Under this opinion, yes, where no antagonistic interests are present, provided the legal protections afforded the residents' minority interests are observed. The committee found no immediate conflict on the facts presented, over two dissents.

Q: What happens if the developer's and the association's interests later conflict?

A: The committee said cause might then arise for withdrawal from representing either or both parties, as the circumstances at that time might dictate, but it did not decide that question.

Background and rules framework

The opinion applied the former Canon 6 on representing conflicting interests, in the setting of a single firm jointly representing a developer and an association under the developer's control. Concurrent conflicts and joint representation are now addressed by Rule 4-1.7 of the Rules Regulating The Florida Bar; the Model Rule analogue is Rule 1.7.

Citations and references

Rules of Professional Conduct:

• Canon 6 [Code of Professional Responsibility; conflict duties now in Rule 4-1.7]

See also

• FL Bar Ethics Op. 69-21: City Lawyer Before City Board

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-69-2/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-69-2-1.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 69-2
March 28, 1969
Advisory ethics opinions are not binding.
A law firm may represent both a developer of a condominium and an association of residents, control of which temporarily resided in the developer, in the absence of any antagonistic interests, provided that the protections afforded by law to the minority interests of the residents are observed.
Canon: 6
Chairman MacDonald stated the opinion of the Committee:
A member of The Florida Bar apprises us as follows:
The problem which we would present to you and your Committee is as follows: This office has been retained by a corporation, profit making, that builds and sells condominium units. We will refer to the client hereafter as the "Developer." We have prepared for the "Developer" a declaration of condominium, a copy of which we are enclosing herewith for your review, wherein it is provided that each purchaser of a condominium unit become a member of a non-profit corporation which we will hereinafter refer to as the "Association" (see paragraph 13 of the declaration of condominium). Now the "Association's" purpose is to govern the affairs of the Condominium. The "Developer" through the declaration of condominium and its By-laws in fact controls the "Association" by retaining unto itself the right to elect a majority of the directors of the "Association." The "Developer" loses this right and thus the control when about 90% of the condominium units are sold. The purpose of the control is indeed obvious. The "Developer" is interested in seeing that his development is handled in such a fashion that will induce sales and in this regard, properly maintain the condominium development. Subsequent to sale of, as stated, 90% of the condominium units, the control then passes to the parcel owners.
We are representing the "Association" as well as the "Developer." At a firm conference, when the matter was discussed, someone raised the issue as to the ethical propriety of representing both the "Developer" and the "Association" since the "Developer" controlled the "Association." This is the question that we pass on to your committee.
The Committee, two members dissenting, has concluded that there is no immediate conflict of interest in the present representation of the developer and the association under the circumstances described in the inquiry. Naturally, representation of the majority interests involved requires that any protections afforded by the law to the minority be observed. Counsel representing the majority should exercise particular care to see that, to the extent such protections are within the purview of his professional responsibilities, they are scrupulously observed. Moreover, should the interests of the developer and the association become antagonistic, cause might arise at that time for withdrawal of the representation of either or both parties as may be dictated by the circumstances then present, a question which naturally we do not apprehend at this time.