Member attorney contact with HOA attorney

Started by KarenT • 13 replies • 1891 views

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KarenT (Washington)
Posts: 250

Posted:

Our small (12 home HOA) has a homeowner who continually disputes everything the BOD does and has asked several times that the HOA attorney contact her attorney to review the changes the HOA is trying to amend in our CCR's and By-laws. For some reason she thinks some of the revisions are not legal. Even though she has been repeatedly told the reason the HOA attorney has to review the draft is to make sure the HOA is in compliance with all state laws, etc.. before the draft is even voted on.

So far the BOD have not responded mainly because nothing ever went further than homeowner discussions to amend. However, now that some of the Homeowners have opted to move forward with the revision of the CCR's and have the HOA attorney review our changes, once again this homeowner has asked that the HOA attorney call her attorney to discuss the changes. The BOD wants to respond in writing stating that our attorney will not contact her attorney and if her attorney contacts the HOA attorney she will be assessed the attorney fees specifically related to her attorney contacting the HOA attorney whether it is via telephone, e-mail or written correspondence.

Just an FYI our by-laws specfically state any attorney fees incurred directly related to a specific homeowner shall be assessed to that homeowner.

Any thoughts, suggestions, comments?

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Karen

Do not put the BOD in the middle like saying assessments, etc.

Simply inform her (letter from the BOD)that the name of the HOA attorney is so and so and if she wishes her attorney to contact the HOA attorney to discuss anything that she should feel free to persue it but that that any charges for such will be an issue between the attorney's and not an HOA issue.

Call her bluff.

EricH8 (Virginia)
Posts: 116

Posted:

What if this "homeowner who continually disputes everything" turns out to be correct? Is it fair that she should have to pay for both attorneys? If it was a court case, the losing side would probably pay the attorney fees.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By JohnC46 on 09/20/2012 2:57 PM
Karen

Do not put the BOD in the middle like saying assessments, etc.

Simply inform her (letter from the BOD)that the name of the HOA attorney is so and so and if she wishes her attorney to contact the HOA attorney to discuss anything that she should feel free to persue it but that that any charges for such will be an issue between the attorney's and not an HOA issue.

I agree with John's advice but would go one step farther and suggest that the BOD inform the HOA's attorney that this owner's attorney may be in contact. (Personally, I doubt that it will happen.)

What to do next is not so easy. If the troublesome owner's attorney raises a valid issue, the board needs to know what that issue is and how to handle it. This means that even though the issue was raised by an owner's attorney, the association is receiving legal advice from its own attorney. It is not fair to any owner to assess charges for legal fees when the association benefits from the legal advice.

The idea of assessing legal fees against an owner is repugnant. It's effect is to deter owners from seeking legal advice and bringing legal matters to the attention of the association. Most states have laws governing when one party pays for another's legal counsel and I would find it hard to believe that this provision in the bylaws would pass the smell test.

TimB4 (Tennessee)
Posts: 21,059

Posted:

There is another issue. Typically the Association attorney is also the registered agent for the corporation. As the registered agent, they are the legal contact for the Association.

We actually had a potential buyer contact our attorney/registered agent to ask questions about the Association. The attorney then provided the Association with an invoice for $60 for their time as our representative. This led us to revamp a lot of procedures and documents to try and make sure it doesn't happen again.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

If a homeowner wants to voluntarily seek a legal opinion on a non-controversial matter, the board is not impeding that. The board isn't subsidizing it.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By KellyM3 on 09/24/2012 8:46 PM
If a homeowner wants to voluntarily seek a legal opinion on a non-controversial matter, the board is not impeding that. The board isn't subsidizing it.

The homeowner always has the right to seek legal advice on any matter whether the board considers it controversial or not and the HOA has no legal right to prevent the homeowner from doing so.

The homeowner cannot control whether the association will seek legal advice or assistance on any issue. Unless there is a provision in the CC&R's or state law to specifically allow the association to assess an owner for legal fees it unilaterally claims it incurred because of the owner there would be no legal basis for doing so. Assessments can be levied only if authorized by law or the CC&R's.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Larry,

I agree with you that the homeowner has the right to seek legal opinions. I also agree that Associations can only levy Assessments authorized by the law and/or the CC&Rs.

The original issue is that the member understands that the Attorney works for the Association and not the membership but the member doesn't trust the board and wants to talk to the Associations Attorney directly on the Associations dime.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

The HOA needs to let it be known what the cost is whenever the HOA lawyer gets involved. Lawyers do charge for every phone call, questions, and email responses once hired. The cost can be minimal of like $25 to a few hundred dollars depending on the service/response required. It depends on the contract with the lawyer that is setup. If they are on a retainer or based on other criteria. There are charges involved when consulting a lawyer period.

So when this person wants their attorney involved the HOA could be paying their attorney for the response. Which means the money comes out of the HOA's budget. This makes the person with their own attorney paying twice if they were to request interaction between the two lawyers. I would suggest they instead just consult with their own attorney with their own questions after action is taken by the HOA attorney. No need for attorney's to be involved until actual actions have been taken. You can consult and question an attorney all day long on your own dime. Just doesn't make sense to do anything until some actions have been put into motion.

Yes, my sage old advice on here still stands...You sue your HOA, your suing yourself and your neighbors...Having a person say they are going to have their attorney talk to your attorney is just a delay tactic on their part. If you all have to make decisions then just do it. Eventually, this person will learn the price of it all coming out of their pocket on both ends. It is better to counter sue on the HOA's part than to sue anyways. So if that is the direction they want to go in...Fine and dandy let them. Just counter sue back...

Former HOA President

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By TimB4 on 09/25/2012 7:54 AM

The original issue is that the member understands that the Attorney works for the Association and not the membership but the member doesn't trust the board and wants to talk to the Associations Attorney directly on the Associations dime.

I think I had not picked up on the idea that the owner in question wanted to consult with the association's attorney. That is not what the OP stated.

Most association attorneys would refuse to consult with the homeowner as there is the possibility of a conflict of interest.

If the homeowner has an issue he/she should consult with his/her own attorney. I misunderstood the previous comment by Kelly as I thought Kelly meant that the homeowner should not do that.

The OP, Karen, stated that "our by-laws specfically state any attorney fees incurred directly related to a specific homeowner shall be assessed to that homeowner." I interpretted that to mean that if the homeowner's attorney raised an issue with the board then the board would assess the owner for the costs of their attorney to respond. In fact, Karen herself said pretty much just that: "if her attorney contacts the HOA attorney she will be assessed the attorney fees specifically related to her attorney contacting the HOA attorney whether it is via telephone, e-mail or written correspondence."

I stand by my previous comment that this is bad policy as it deters homeowners from bringing valid legal concerns to the attention of the board.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

There is no deterrent effect. If the HOA has no provision for covering legal fees on behalf of private citizens, then there's no subsidy. The debate is over the subsidy.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By KellyM3 on 09/26/2012 6:08 PM

There is no deterrent effect. If the HOA has no provision for covering legal fees on behalf of private citizens, then there's no subsidy. The debate is over the subsidy.

Let me see if I have this straight.

Suppose you are on the board and I am a homeowner. After consulting with the HOA attorney, the board proposes taking a particular action. I suspect that the HOA's attorney is not too smart so I consult my own attorney, who points out that state law explicitly prohibits the action, makes the proposed action a felony, and holds everyone on the board both criminally and civilly liable in their personal capacities.

If I instruct my attorney to say nothing, you go to jail, file for bankruptcy and your family ends up living in a cardboard box under a bridge. If I instruct my attorney to contact the association and/or its attorney, and the association's attorney realizes his mistake and advises the board not to take the action, then you stay out of jail and keep your savings but I have to pay for both my own attorney and the association attorney's services. What do you think I would do?

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By LarryB13 on 09/26/2012 9:33 PM

As a homeowner, you're not hiring your own legal representation to "save" the HOA board. In this case, you're confused as to board policy or rule making and/or rules and seeking clarification of the board's decision.

As a homeowner, your attorney (or yourself) should submit your findings to the HOA board in a public meeting...on the record.

The board then chooses how to address your concerns, including calling its own attorney. But, it's not the board's duty to pay its attorney because your lawyer is calling him. You're circumventing the very people you're "helping."

You're choosing to hire your attorney. That's your prerogative as your opinion is that the board is in error. Opinion.

What would I do? I wouldn't pay a couple of hundred dollars to save fools from their folly. However, a board that follows a lawyer's advice isn't acting w/ gross negligence - it's seeking help from an attorney in good standing with the state bar.

We're off the deep end with this.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Kelly,

Normally an attorney's first contact with an opposing party will be with the party itself, and not their attorney. It would be presumptive for the homeowner's attorney to contact the association's attorney, even if that is what his client wanted. The association may have multiple attorneys and it would be up to the association to designate which attorney, if any, it wished to respond to the homeowner's concerns.

I am unaware of any legal requirement that an aggrieved homeowner or his attorney must appear at a board meeting and speak on the record. A letter served on the association becomes a part of the association's records upon receipt.

Again, the OP indicated that whenever her association incurs legal fees in response to an owner's actions that the association seeks reimbursement from the homeowner no matter what the cause was. My opinion is that this is bad policy as it deters homeowners from bringing valid legal concerns to the board.

You wrote: "However, a board that follows a lawyer's advice isn't acting w/ gross negligence - it's seeking help from an attorney in good standing with the state bar." The board members are always responsible for their conduct regardless of their attorney's advice. The law and not the attorney is the controlling authority. Depending upon the type of action brought against board members, evidence of the attorney's advice may not even be admissible.

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