CJE Opinion No. 2001-6
Serving as Member or Officer of Condominium Board of Governors
March 22, 2001
CJE Opinion No. 2001-6
You ask whether service as a member or officer of the Board of Governors of your condominium association is permitted under the Code of Judicial Conduct.
We understand the facts as provided in your letter and accompanying materials to be as follows:
1. The condominium association is made up of 56 units in one four-story building. Each unit owner has an interest in the common areas and facilities of the complex.
2. The "association" is a non-profit corporation of unit owners organized pursuant to Chapter 180 of the General Laws.
3. The Board of Governors consists of three to five individuals elected by the members of the corporation. Those elected serve without compensation.
4. The members of the Board of Governors elect the officers of the corporation, namely the President, Treasurer and Clerk.
5. The Board of Governors meets monthly or on an as-needed basis to oversee the financial and business operations of the organization. It retains the services of a management company pursuant to a negotiated contract. It authorizes the hiring and payment of vendors, allocation and investment of reserve funds, and from time to time resolves disputes between owners, usually by compromise or settlement.
6. To your knowledge, the corporation, established in 1982, has not been involved in any court litigation.
The answer to your question is determined by the application of Canon 5 which, as we stated in CJE Opinion 98-7, seems to divide the world of organizations into the categories described in Canon 5(B) and Canon 5(C)(2). Canon 5(B), with some qualifications, permits service as an officer or director of an educational, religious, charitable, fraternal or civic organization not conducted for the economic advantage of its members. Canon 5(C)(2), however, while permitting a judge to hold and manage investments, including real estate, prohibits service as an officer, director, manager, advisor or employee of any business.
In Opinion 98-7, we found that a non-profit golf club fit neatly into neither category since it was not clearly either a "civic" or "fraternal" organization or a "business." We ultimately concluded that the golf club had more elements of a business in that it had 600 members, 18 to 30 employees, a budget in excess of $1 million, and a major capital improvement project underway. Accordingly, we advised that Canon 5(C)(2) should be read as not permitting service as a director of that golf club.
Service as a member or officer of the Board of Governors of a condominium corporation is also not readily characterized either as "a civic activity within the permissive reach of Canon 5(B) or as a 'business dealing' within the prescriptive contemplation of Canon 5(C)(2). It has attributes of both in that, on the one hand, the endeavor possesses certain commercial features, but on the other hand closely approximates a real estate investment not forbidden to [a] judge under Canon 5(C)(2). It is, moreover, directed at the saving of expense and at the wise expenditure of funds rather than to the realization or earning of income." (Federal Advisory Opinion No. 29)
Your duties as a member of the Board of Governors would relate primarily to the management, maintenance, protection and preservation of your own residence and the facility in which your residence is located. Your activities as a board member, while done in part on behalf of other unit holders, protects your investment much like the maintenance, protection and preservation activities of a judge living in a single-family residence protects his or her investment therein.
However, a judge's ability to serve as a member of such a board is not unfettered. Should the activities and make up of the condominium association be such that substantial business dealings are involved then the prohibition contained in Canon 5(C)(2) is applicable.
Federal Advisory Opinion 29 provides some guidance with which we concur.
The condominium complex in which you reside is contained in a single four story building. The day-to-day operation of the corporation is delegated to a management company. The corporation has not been involved in litigation and is unlikely to become involved in litigation in your court. Our consideration of these facts in the context of the above guidelines leads us to conclude that your participation as a member or officer of the Board of Governors of the condominium association where you reside is not automatically proscribed by the canons. You should, however, examine other factors not known to us such as the size of the annual budget of the corporation, the amount of the reserve funds, the likelihood of substantial capital improvements being made, and the likelihood of the acquisition of abutting properties or buildings. Moreover, the distinct duties of each member of the Board of Governors ought to be examined. It may be that service in one position as an officer on the board would entail far more business-type contacts with outside enterprises than service in another position as an officer on the board or than service on the board as a member only.
Furthermore, we point out commentary to the A.B.A. Code of Judicial Conduct which says that "[t]he changing nature of some organizations and of their relationship to the law makes it necessary for a judge regularly to reexamine the activities of each organization with which he is affiliated to determine if it is proper for him to continue his relationship with it."
You state in your letter that the duties of the Board of Governors include, among other things, investment of reserve funds, resolution of disputes between owners, interpretation of the by-laws or the master deed, and enactment of rules and regulations. Should you choose to serve as a member or officer of the Board of Governors, your service is subject to certain limitations which, although they may be self-apparent, we call to your attention.
A. Although the board has responsibility for investment of reserve funds, you may not give investment advice. Canon 5(B)(3)
B. As part of the board's effort to resolve internal disputes between unit owners, you may not act as a mediator or arbitrator. Canon 5 (E)
C. You may not act as the organization's legal advisor. Canon 5(F) (A judge should not practice law.) and G. L. c. 211B, § 4 (The justices of the trial court shall not directly or indirectly engage in the practice of law.)
Finally, we note the basic themes of Canon 2 (that a judge should avoid impropriety and the appearance of impropriety in all activities) and of Canon 3 (that the judicial duties of a judge take precedence over all his other activities).