Legal Advice and Strata Corporations

WHAT IS LEGAL ADVICE?

"Legal advice" is a phrase that has a particular legal meaning that is not the same as used by the general public. It is reasonable to assume that most people consider "legal advice" to mean an explanation of what the law is, but legal advice is much broader than that.

Legal advice starts with the facts a Strata provides to its lawyer and necessarily includes the lawyer investigating and understanding those facts, because investigation is integral to a lawyer's function. It results in advice about what the Strata should do in a particular situation, not merely a recitation of the relevant law. This remains true even when a statute requires the Strata to carry out part of the investigation itself; a lawyer conducting even a statutorily mandated investigation is still acting in a legal capacity, not stepping outside it.

Legal advice is also not confined to a single exchange of information. It is a continuum that runs from the facts a Strata furnishes to seek the advice through to the Strata's own internal discussion, once the advice is received, of what it means and what to do about it.

For example, a lawyer's memo to the Strata is legal advice. The Strata's own subsequent record of that memo, including in-camera minutes noting that it was received and discussing what Council should do about it, falls within the same continuum. The advice does not stop being legal advice the moment it lands in the Strata's inbox.

WHO CAN PROVIDE LEGAL ADVICE?

Legal advice can be provided by a professional legal advisor who is consulted in their professional capacity. It can also come from members of the lawyer's firm acting in the lawyer's place and under the lawyer's direction.

Capacity, not title, is what matters. A lawyer who happens to sit on a Strata's Council, or who is asked for a personal favour rather than a professional opinion, is not providing legal advice merely because they hold a law degree. Consequently, whether a communication is legal advice turns on the capacity the advisor was acting in when it was given, not on who they are generally.

WHAT IS NOT LEGAL ADVICE?

Not everything a lawyer says or does is legal advice. A lawyer who is asked for business advice, or a personal favour, rather than legal advice, is not providing legal advice simply because the person asked happens to be a lawyer. Our experience is that a member of Council sometimes assumes that any conversation with a lawyer, on any topic, is automatically treated as part of the matter. It is not.

Similarly, information sent to a lawyer that is not used in providing legal advice is not legal advice itself. An Owner's casual email to the Strata's lawyer asking for an unrelated personal recommendation, for example, is not part of the matter and is not legal advice, even though the recipient happens to be a lawyer.

WHO IS THE CLIENT?

People might think that because it is Council that communicates with the lawyer, Council is the lawyer's client. However, Council only exercises the powers of the Strata Corporation, and it is the Strata Corporation, as a distinct legal entity, that is the client.

Once a Strata Plan is deposited, the *Strata Property Act* establishes the Strata Corporation, and the Strata Corporation has the power and capacity of a natural person of full capacity (s.2). It can hold property, enter contracts, and retained legal advice in its own name; the Owners are its members, but the Strata Corporation is a distinct legal entity from any of them. The powers and duties of the Strata Corporation must be exercised by Council (ss.4 and 26), and each member of Council must act honestly and in good faith with a view to the best interests of the Strata Corporation, not their own interests or those of whichever Owners elected them (s.31(a)). This means Council is the mechanism through which the Strata Corporation acts and instructs its lawyer, not a separate client with interests of its own.

When a Strata has Sections, the analysis narrows rather than changes. A Section is itself a distinct legal entity, with the same powers and duties as the Strata Corporation, for any matter that relates solely to it, including the capacity to contract and hold funds in its own name (s.194(2)). On a matter within that scope, the client is the Section, not the Strata Corporation as a whole, and it is important to identify which entity is actually asking the question before a lawyer is retained.

Instructions to the lawyer should come from Council by resolution, not from any individual member of Council acting alone. A member of Council who emails the lawyer with a personal view has not, on that basis, instructed the Strata's lawyer on the Strata Corporation's behalf.

DOES IT MATTER IF THE PROPERTY MANAGER IS INVOLVED?

It can matter if the property manager is involved. Most of our communication on a Strata's file, in practice, goes through the property manager rather than directly with a member of Council, and that is not itself a problem.

What matters is what the property manager has actually been authorized to do. A property manager who is authorized by Council to instruct the lawyer, or to seek legal advice on the Strata Corporation's behalf, functions as the Strata Corporation for that purpose. A property manager who is authorized to only gather information and pass it along to the lawyer is not the client, however essential that information is to the advice the lawyer ultimately gives. The line is drawn by authority, not by usefulness.

This is why delegation to a property manager should be explicit about whether it includes the authority to instruct the lawyer. It is important for Council to specify, in the delegation itself, whether instructing counsel is included, because a Strata that delegates day-to-day administration to a property manager without addressing legal instructions specifically risks confusion about whose direction the lawyer is meant to follow. We have written about the risks Council takes on when it delegates its authority generally in another article, and the same reasoning applies here: delegation is not a way for Council to escape responsibility for how the file is instructed.

STRATA COMMUNITIES MUST BE THOUGHTFUL ABOUT ACCESS TO LEGAL ADVICE

Legal advice is a continuum that starts with the facts a Strata provides to its lawyer and continues through to what is done with the advice once it is received, and it can properly come from a lawyer or from members of the lawyer's firm acting under the lawyer's direction. However, none of that is useful if there is confusion about who the client actually is.

The client is the Strata Corporation, or, if the subject matter relates solely to it, a Section — not Council as a body distinct from the Strata Corporation, and not any individual member of Council or Owner. Instructions should come from Council by resolution, and delegation to a property manager should be explicit about whether it includes instructing the lawyer. Keeping that straight is what allows a robust and resilient Strata Community to get, and to rely on, legal advice when it actually needs it.