Filing small claims action - Board or Mgt. Co.

Started by DavidA7 • 1 replies • 1338 views

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DavidA7 (California)
Posts: 179

Posted:

Hello there,

California HOA

we are thinking of small claims action against a unit that does not and will not pay their HOA dues. My question is we have a Mgt. Co. and we may wish to file a small claims action against the unit. Would you advise that the Management Co. perform the process or a Board Member? My thinking is that we want the Mgt. Co. to do it so we stay out of the process. Why do I say this well #1 is I'm afraid of the Unit Owner as they are potential gang affiliated and if it becomes obvious that say I am the one doing this they may try something as they have verbally threatened me in the past versus the entire board approving this action against the unit owner.

I have heard that we can abdicate the process to the Management Co. They can file the claim but a Board Member should be at the Court date versus just the Management Co. representative. I have also been told that why am I having a Mgt. Co. do this as I should just do this on my own as a Board Member obviously with approval of other Board Members.

Your thoughts?

Have any of your associations, hopefully response from CA association, been successful in this process down to filing a lien against the unit if won case.

Thanks,

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Don't sue is my first piece of advice. It's better for your HOA to place a LIEN on the property. A lawsuit will just get you a court JUDGEMENT. A lien is also a cour JUDGEMENT but it has stronger teeth. A court judgement either way you go, doesn't guarantee you the money in any kind of timely schedule. A small claims suit will allow the person to sell their property and move. Some states allow up to 7 years for a judgement to be paid. After that the judgement may have to be renewed. Who's going to remember in 7 years to do that?

A lien keeps the owner to the property. They can't sell the property until the pay the money that is owed. Which doesn't prevent them from renting the property indefinetely, but the money keeps adding. The lien should also include legal fees related to filing the lien.

As for the hiring of the attorney, that is like hiring a contractor like your management company. Your management company is a contractor to the HOA. They are to do what the board tells them to do. It would be similar to the attorney hired. The HOA would have to do the hiring. However, I would suggest having 1 POC on the board to interact with the attorney. An attorney is typically required to represent a HOA in most states since it is a corporation. The attorney represent the HOA as a whole and not for the individuals in it.

There are tips to hiring an attorney to lower costs. You will have to pay a retainer fee. After that, it's usually an hourly rate with email/phone calls/communication methods being charged. There is also the filing fees and paperwork prep charges to account for. It's also best to hire an attorney familiar with CONTRACTUAL or business/corporate laws. A real estate lawyer isn't the type to use. There are some lawyers that specialize in HOA law you may find. Don't expect any Pro Bono work...

Former HOA President

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