Homeowner Has Requested Breakdown of Attorney Expenses

A homeowner has asked for a breakdown of attorney expenses because they are:
"...concerned about the amount of money being spent on attorney fees by the HOA. I would like a breakdown of what fees we have paid [the attorney] and in regard to what issue. I want to know particularly how much money was paid to his firm to review (and subsequently approve) a [proposed document] approved by the BOD in October]."

Can someone help me understand if/how this can be done? I believe there is information contained in the attorney's bill(s) that is supposed to remain confidential (related to collecting delinquencies and other confidential matters).

The homeowner wants this information because attorney time was approved and expended on developing community governance guidelines that were not adopted, and seems to be asking for this information related to a reasonable sounding purpose. But to what end and for what legitimate purpose? Asking for a refund because the document they wanted approved by the Board ultimately did not get adopted?

Is a board supposed to spend time running errands and fishing for this kind of information for homeowners?

I fought this battle when our HOA was still under developer control. The attorney hired for the association by the developer controlled board had previously done legal work for the developer and had no background in HOA law. Our legal expenses, as shown in the monthly financial reports, were running much higher than the budget. I suspected that some of the work being billed to the association was really work in support of the developer.

I submitted a written request to examine the attorney's invoices following the procedures specified in the association's policy governing examination of association records. My request was denied. I eventually submitted a complaint to the State of Virginia's Common Interest Community Board Ombudsman (with a copy to the association's board). The Ombudsman's office eventually refused to intervene because the basis cited by the board for denying access to the invoices was in conformance with Va. statutes covering attorney-client communications.

Nevertheless, after additional pressure on the board from a group of association members I was eventually given highly redacted copies of the invoices. There was so much blacked out that it was not possible to tell what work was being billed by the attorney.

Now, the developer is gone. We have an elected homeowner board, and a new attorney.

The budget should have a legal fees line item in it.

If this figure is exceeded, then an explanation is needed.

so . . . WHY is the fee becoming exceessive?

Your newsletter (in the President's report) could state something like "Our attorney was retained to handle issues stemming from the blah, blah. Cost to represent our HOA in court was $XXX over budget."

Is a board supposed to spend time running errands and fishing for this kind of information for homeowners?

Kelly,

the above statement troubles me. If VA statute says that the owners have the right to inspect financial records than you have to give it to them and without questioning their reasons.
Also, I have never heard of any provision stating that HOAs expenses for legal fees are records protected by the lawyer-client privilege? It just does not make sense.

I agree with Marianne.

I understood that Kelly's concern was that the actual bill might contain confidential info. Our bills from the attorney do specify a fair amount of detail. Therefore it is possible that a bill to review documents could also include hours for a foreclosure and might mention names, etc.

Personally, I don't think that what the person is asking for is unreasonable since they specified a specific issue that is typically not a confidential manner like entering into litigation. I am concerned that releasing the actual bill might be setting a dangerous president which is why I suggested the earlier verbage. However, if the Board wanted to just specify that the legal advice for reviewing and offering legal opinions on documents cost $xx.xx I don't think that it would be a big issue. After all, I believe that it's prudent for any Board to seek a legal opinion when creating rules, guidelines or rewriting the governing documents and it's not an expense that will be seen every year.

Tim

"Ask them exactly what are they trying to find out and address the issue head on. Nothing more annoying than a homeowner demanding paperwork that isn't going to change the money spent or the results of an action"

The HOA/Homeowner relationship is NOT a matter of us vs. them. The motive of the homeowner in asking for a breakdown of the attorney costs is not the issue. It is a legitimate request and can be easily answered. It goes without saying that the HOA cannot under any circumstances include any information of a personal nature such as who is being foreclosed, who is arrears in their payments, who is in violation of covenants, but the HOA can and should most certainly provide the requested information to the homeowner. Otherwise, it appears that the HOA BOD is acting in a suspicious way. The HOA BOD is there to serve; not to keep information from the homeowners.

I agree, Donna, that maybe we need more information from Kelly C. In her post she says the homeowner asked for a breakdown of fees paid regarding what issue and particularly what was paid for the atty review of the proposed document. That seems pretty specific to me. I do not understand why there would be a problem in supplying the information????? Has this particular homeowner bombarded the board with previous requests? Does the BOD think s/he has some ulterior motive in asking for this information? I just believe to the bottom of my toes that homeowners have every right to query the BOD. It is the homeowners who are investing in this property, and if they are up-to-date in their fees, I cannot see a reason for denying them information that should be public anyway.

Most of us here should have been on both sides of the HOA, As a homeowner, I paid lots of attention to what was going on, mostly thru the Board meetings and all other meetings. Followed the Budget and just got involved.

As a Board member, I saw things different. I saw those who never got involved, never showed up and those were the ones who had the most questions. It was a dreaded day when one of those wanted to inspect something or to be provided with a paper that they could have had if they were more attentive, looked at emails and the website or came to meetings.

I am not saying that Kelly's H.O is that way but I always question, What the heck are they looking for. For Gods sake, just ask rather than send everyone into search mode. And then of course, there are those who do not get the part where the Board has been elected (in most cases) to MANAGE the affairs of the association. Let them do their job without someone as you say, micromanaging the Association.

My point is to find out the homeowner's intent on knowing this information. If it is take over where they failed, then I could see them needing this information. I to would request this information IF it was a project I wanted to take on and find a resolution to. However, if the purpose of the information is to be used as some kind of "Look at how our HOA spends it money on...or a Witch hunt" then not so much.

Either way, I would want to know the intent of this owner prior to releasing such sensitive information. The information is only useful as lesson learned.

I would agree more with MarianneG on this.

1. It sounds like the HO was fairly specific in their request, maybe to double check to see if there was actuall legal research done into an issue. I have heard boards say " we checked with our attorney on that..." simply to bypass a issue for one reason or another.

2. The request does not seem all that burdensome. Add the few lines together on the bill. Your BOD Treasurer or MC should be reviewing those statements anyway.

Obviously the HO should not receive the whole bill, but attorney client priveledge is "the HOA's" to deal with as the board wishes. The board owns and is responsible for that priveledge and can let out basically what it wants to, as long as it does not infringe on personal private or financial issues ... there is no set rule.

What is there to hide in this situation? I don't think that ACP can or should be used as a general cloak.

General culture and resulting HOA legal evolution is moving towards more disclosure. The days of the hidden, all powerful, iron clad HOA board are over. Thats a relief... Less FREAKS on the boards.

Take Care

I agree with James. A property owner/dues payer is part-owner/investor in the property the BOD is directing. Give the information as the board or its property manager should keep records and invoices since the BOD is spending dues when it calls the lawyer.

Intent of the property owner doesn't matter. I've had more than "demand" things in order to prove that I (pres) or the board are a bunch of idiots. So far, the facts have betrayed them.

It used to offend me. Now, I just take their suggestions and ask how the complaintant will be assisting/volunteering in making the requested change, etc....they go away. In the back of my mind, I've figured as a volunteer, I can stop whenever I like dealing with the HOA.

The perception of an HOA board's relationship to its "members" is skewed, in my opinion. Having been on a board for four years now and served as president, my own perception changed recently.

Property owners who pay dues see themselves as customers of the property or HOA. The term "customer" is out of line. In reality, property owners are form or share holder if not co-owner of the property along with everyone else who pays dues.

HOA board members are not employees of the property owners. They are elected volunteers who choose to help manage the property, if the board has a healthy intellectual purpose, and represent the property owners in a republic-style of government. Direct voting of hundreds of property owners on all issues would cause stagnation and no achievement of any goals.

1. Property owning dues payers, whether they know it or not, help pull the sled. They pay to upkeep THEIR property and cost themselves money by assuming that, since they pay dues, they shouldn't get their hands dirty volunteering. It's that approach that leads to the lack of volunteerism and takes me back to my philosophy of "I really don't have to put up with your droning. I'll drop the job in your lap and test your armchair quarterbacking."

2. Board members are inherently no more special than a "rank-and-file" property owner who pays dues. They've chosen to volunteer and won an election to work for free. I'm against paying board members for their labor but not for supplies reimbursement.

- I helped cool off the busy-bodiness of myself and our board by scheduling only quarterly meetings. That meant that we had tangible business needs at our meetings w/ little time for other chatter and silly complaints. It's worked better than anything else. That said, our by-laws call for quarterly meeting but the board had developed a habit of meeting monthly.

- Less frequent meetings inherently save your HOA money because you'll focus on maintenance items and not extensions of amenities at the expense of maintaining existing amenities, flower beds etc. We had that challenge as well.

Take care, All!