Property Manager Sanctioned for Unauthorized Practice of Law
Another property manager has been sanctioned for the unauthorized practice of law. What did the property manager do improperly?
Under Ohio law only an individual licensed as an attorney can commence, conduct or defend any action or proceeding for or on behalf of another person or an entity, such as a LLC or corporation. The unauthorized practice of law is the rendering of legal services for another by a non-attorney. Enforcement of Ohio's regulations on the legal profession, including what activities constitute the practice of law and punishment for non-attorneys engaged in the unauthorized practice of law is the Ohio Supreme Court.
The Ohio Supreme Court has sanctioned individuals who have engaged in the unauthorized practice of law, some of those being property managers. A common issue in those cases is a property manager's role in eviction proceedings. The Ohio Supreme Court has ruled that a non-attorney property manager cannot file a complaint for eviction and recovery of past due rents or other damages on behalf of a property owner. This issue was again addressed in a recent case before the Ohio Supreme Court.
In this case, the property manager was found to have engaged in the unauthorized practice of law when he drafted, signed and litigated in a representational capacity eviction actions and related claims for damages against current or former tenants of property owned by third parties. Over close to a two and a half year period the property manager had filed 171 complaints on behalf of property owners. The owners were either trusts, LLCs or other individuals.
The Ohio Supreme Court ruled that non-attorneys cannot engage in the legal representation of trusts or other legal entities, including LLCs. This rule applies to legal entities in which the property manager has an ownership interest. In this case, the property manager has an ownership interest in most of the LLCs and he and his family members are the trustees of most of the trusts. It also didn't matter that the property manager did not charge a fee for the activities found to be the unauthorized practice of law. A non-attorney cannot file an eviction action on behalf of another individual or an entity whether paid for those services or not.
The property manager agreed to be permanently enjoined from engaging in the unauthorized practice of law and to pay a civil penalty of $2,500. The property manager was also enjoined from collecting any money judgements on the cases he had filed and was required to hire an attorney to dismiss pending actions.
The Ohio Supreme Court has again ruled that a property manager cannot file and litigate an eviction action on behalf of others, including legal entities in which the property manager has an ownership interest. A property manager can, and are often asked to, testify or provide documentation to substantiate the basis for the eviction action. However, the property manager cannot file and litigate the legal action. A property manager should always refer eviction actions to an attorney.
A real estate licensee who engages in the unauthorized practice of law can not only be sanctioned by the Ohio Supreme Court but Ohio real state license law prohibits a licensee from performing any service for another constituting the unauthorized practice of law. The Ohio Real Estate Commission can sanction a licensee for such conduct. Likewise, Article 13 of the REALTOR Code of Ethics prohibits REALTORS from engaging in activities that constitute the unauthorized practice of law.