Our HOA is charging me $1,510 in legal fees

ShashiA1 (Virginia)
Posts: 18

Posted:

because I sent them a letter requesting access to inspect the HOA documents. Southern Walk at Broadlands HOA, Virginia, is very secretive in their work. They do not like homeowners asking questions. This is a second HOA for us and its responsibility is only to manage the telecommunications contract. They main HOA manages the common areas and they are very responsible.

In response to my request, they sent me non-disclosure agreement to sign. According to them, all their documents are "confidential" and any leaks would cause them "damage". This NDA is followed by a letter asking me to pay $580 for copying nearly 220 pages of minutes docs. This fees includes $75/hr charge for 6 hours for copying. And it was followed by $1,510 bill for legal fees. I presume their claim is, they spend over $1,500 in legal fee responding to my request.

There was no explanation given for the charges, nor I was give any notice of hearing before levying the charges.

Funny thing is, they charged my account on August 1st, and mailed a notice on August 14th claiming the due date as August 13th. I have already received a late notice.

Obviously, this HOA is trying to intimidate from asking questions and disqualify me from attending the meetings.

I will post the documents as needed.

Any suggestions on how to handle the HOA.

GlenL (Ohio)
Posts: 5,491

Posted:

Shashi, I hope I'm doing this right. Tim our resident VA expert posted some links that might help you in another thread:

Virginia Property Owners' Association Act
Virginia Condominium Act
Virginia Nonstock Corporation Act
Common Interest Community Ombudsman Regulations
Office of the Common Interest Community Ombudsman website

Studies show that 5 out of 4 people have problems with fractions

ShashiA1 (Virginia)
Posts: 18

Posted:

Thanks Glen.

I went thru the Virginia Code from the websites you listed. Did not find anything to support what the HOA board is doing. Unfortunately, all the laws and regulations mean nothing, unless a complaint is filed in the court.

I am not looking for legal advice, but I am looking for advice from every point of view, including attorney referrals, etc. I need to defend myself from this illegal charge against me and also gain access to the HOA documents without entering into any unnecessary NDAs or paying exorbitant fees.

I will check into ombudsman.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Shashi,

Welcome to the forum.

VA law gives a member the right to examine the records of the Association except for certain, very specific, documents. Per that same law, if you ask for copies, the Association may charge you for the time, material and expense to make those copies.

Personally, I wouldn't sign a non-disclosure agreement. The Association may ask but the member doesn't have to sign it as there is no requirement in the law for non-disclosure. You may not use the information obtained to make money (i.e. ask to see a contract so you can underbid the contract when it's up for renewal OR obtain a copy of the mailing list and send out solicitations).

I would caution posting any of the information you receive on the internet. Discussing it with your neighbors is one thing. Disclosing it to the world is something else.

It does appear that your Association is playing hard ball.

1) I would suggest that you read and understand your governing documents and applicable Virginia laws. Here are some links that may be useful:

Virginia Property Owners' Association Act

Virginia Condominium Act

Virginia Nonstock Corporation Act applicable if you Association is incorporated as a nonprofit (most are but check to be sure)

Common Interest Community Ombudsman Regulations

Office of the Common Interest Community Ombudsman website

2) I would ask for an explanation of the charges (and do this in writing, perhaps even sending it via certified mail as you need to start a paper trail).

Lets see what they say and go from there.

BTW - You should take a look at the forums posting rules as mentioning of names or Assocaitions is not allowed. It can cause legal problems.

If I may ask, what is the issue that prompted you to ask for documentation?

Tim

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 1:39 PM
Thanks Glen.

I went thru the Virginia Code from the websites you listed. Did not find anything to support what the HOA board is doing.

Shashi,

The authority to charge for copies comes from:

VA § 13.1-933
VA § 13.1-934
VA § 55-509.3
VA § 55-510

I didn't look for the applicable sections in the condominium act.

ShashiA1 (Virginia)
Posts: 18

Posted:

Tim,

Yes, I am planning to send them a letter requesting the explanation of the charges and substantiation with the vendor's invoices. Not sure they would respond, but I wont be surprised if they tag on additional charges against me for the costs incurred. I guess that the risk I have to take.

The HOA is involved in a lawsuit with the telecommunications provider. To fund the lawsuit, a special assessment of $30/month for the calender year of 2013 is assessed. In the January meeting, President of the meeting said that $25 of the assessment will be used for funding the litigation and $5 for collection efforts. This $5 amounts to about $70,000. At that time, overall outstanding dues were $30k which were already in collections. So I asked, why is the board budgeting $70k to recover $30k which are already in collections. Board claimed it has no obligation give me any additional information other than the balance sheet provided in the prior years annual meeting. That is the main reason for my inquiry.

Can the admins give me edit privs to remove the HOA identification?

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By TimB4 on 08/30/2013 1:59 PM

Posted By ShashiA1 on 08/30/2013 1:39 PM
Thanks Glen.

I went thru the Virginia Code from the websites you listed. Did not find anything to support what the HOA board is doing.

Shashi,

The authority to charge for copies comes from:

VA § 13.1-933
VA § 13.1-934
VA § 55-509.3
VA § 55-510

I didn't look for the applicable sections in the condominium act.

Tim,

Those codes give the authority to impose "reasonable charge". Not sure how anyone can justify $2.35/copy as reasonable charge.

I am more concerned about the HOA charging me $1,510 for legal expenses in response to my request.

Shashi

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 2:06 PM

The HOA is involved in a lawsuit with the telecommunications provider.

Well, litigation is considered privileged and the Association doesn't have to give you anything related to the case until it's finalized.

Therefore, the fact that they are willing to give you the information is a good thing. In this case, I can see the need and would likely agree to a non-disclosure clause before providing something I'm not legally required to provide.

Quote:

Posted By ShashiA1 on 08/30/2013 2:06 PM

So I asked, why is the board budgeting $70k to recover $30k which are already in collections.

Excellent question.

Sometimes Boards are human also and get into a defensive posture to where they just won't back down. Sometimes they allow the attorney to do the thinking for them. It's sad when either case occurs.

The way to resolve this issue is to do your homework and gather support to either make the board listen or simply recall them and replace them with those who will listen.

You may want to gather support and call for a special membership meeting to vote on continuing this legal action or simply write the bad debt off. This will at the very least make the Board listen to the members. They might not want to answer their questions (and the attorney may even recommend that they don't) but at least the membership will have their say.

Quote:

Posted By ShashiA1 on 08/30/2013 2:06 PM

Can the admins give me edit privs to remove the HOA identification?

We wish. The lack of an edit function is the one thing that has been brought up several times.
Oh well. Mistakes do happen and now you know so it won't be repeated.

Hope this helps,
Tim

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 2:26 PM

Those codes give the authority to impose "reasonable charge". Not sure how anyone can justify $2.35/copy as reasonable charge.

Well, in addition to the actual cost of the copy, you are also having to pay someone to gather the records, search through the records to ensure no sensitive info is being released, make the copies, put the files back together and then notify you that they are ready.

If this is being done by the attorney's office (due to the litigation) I can see it becoming $2.35 per copy.

GnomeX (Washington)
Posts: 253

Posted:

Fishing expeditions cost money... And who should bear the costs?

Now for what people like me as a Board member have to deal with:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/160557/view/topic/Default.aspx

What I suspect is going on is this:

Your HoA is in a lawsuit.

The Board currently in pending litigation is trying to protect everyone's interests. You have a right to view documents and copies of documents. But the documents you are requesting are likely sensitive concerning this litigation.

Which is why they went to an attorney to draft a non-disclosure agreement for your particular document request. You are likely asking for documents that can severely damage the HoA in the pending litigation. If you take those documents, then disclose them, the HOA wants to hold you responsible should they be leaked.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By GnomeX on 08/30/2013 2:52 PM
Fishing expeditions cost money... And who should bear the costs?

Now for what people like me as a Board member have to deal with:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/160557/view/topic/Default.aspx

What I suspect is going on is this:

Your HoA is in a lawsuit.

The Board currently in pending litigation is trying to protect everyone's interests. You have a right to view documents and copies of documents. But the documents you are requesting are likely sensitive concerning this litigation.

Which is why they went to an attorney to draft a non-disclosure agreement for your particular document request. You are likely asking for documents that can severely damage the HoA in the pending litigation. If you take those documents, then disclose them, the HOA wants to hold you responsible should they be leaked.

Our HOA's case was dismissed three times in Federal District court on technical grounds like, lack of case or controversy, and lack of standing and the Appeals court upheld the lower courts rulings on dismissals.

That being said, they offered to give me minutes of the meetings for the last one year. Litigation strategy discussion are held in executing sessions and they are not recorded in the minutes. But I have to sign the NDA and pay $1500 in unexplained legal expenses. So, your concerns as a Board member are invalid here.

ShashiA1 (Virginia)
Posts: 18

Posted:

TimB, how can I get in touch with you?

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 2:06 PM
In the January meeting, President of the meeting said that $25 of the assessment will be used for funding the litigation and $5 for collection efforts. This $5 amounts to about $70,000. At that time, overall outstanding dues were $30k which were already in collections. So I asked, why is the board budgeting $70k to recover $30k which are already in collections. Board claimed it has no obligation give me any additional information other than the balance sheet provided in the prior years annual meeting. That is the main reason for my inquiry.

Can the admins give me edit privs to remove the HOA identification?

I have a question for you SashiA1. How many Board meetings have you attended? Do you know what has been discussed at the Board meetings?

You say these properties are already in "collections". What does mean? Is it concerning foreclosures? My guess is current collection actions are not working and your Board is having to step up to the next level to collect. Most likely foreclosures.

It is NOT unreasonable to pay MORE in collection costs than what is owed in delinquent dues. Let me give you an example. We have one property owner we absolutely have to foreclose on before Nov of this year. The owner owes the HoA $1,100 in unpaid dues going back several years. Worse the owner stopped paying property taxes 3 years ago as well. The owner is now facing County foreclosure. Total back taxes and county foreclosure costs currently owed by this owner is $4,700. The property is up for public auction in Nov. Our HOA absolutely MUST pay these back taxes or the County tax foreclosure will wipe out our lien. Also there are no other liens or mortgages on this property. So this is a low risk foreclosure for our HOA.

Once our HoA pays this owner's back taxes, we then will have to use our attorney to file a foreclosure to collect the $1,100 in unpaid dues.

So what will it cost us the HoA to collect the $1,100 in unpaid dues?

$4,700 Unpaid property taxes (plus penalties) to stop the County tax foreclosure
$5,000 Legal fees for HoA to foreclosure (estimate per our attorney)
----------
$9,700 TOTAL HOA COSTS to foreclosure

So we MUST spend around $9,700 to collect $1,100 in unpaid dues. Is that unreasonable? In this case no. It is very reasonable.

Once our HOA forecloses, we will then sell the property to recoup not only the $1,100 in unpaid dues but also the $9,700 in legal fees and back property taxes we paid.

So yes, it is not unusual at all to pay MORE in costs to collect on unpaid dues.

I do not want to sound mean or demeaning, but what people like you have to understand is that you are often coming from a position of inferior knowledge. People like you often have no knowledge of all the legal aspects like lien priority in regards to collections and see something like $70K costs to collect on $30K unpaid dues and just jump to the conclusion that it is a waste of money. I even have had Board members that do not understand things like lien priority.

Just in this above case I am dealing with now, we will spend nearly 10 times as much to collect a $1,100 debt. If we DO NOT ACT, we will lose the opportunity to collect that $1,100. If we do NOT act, we will lose $1,100. If we spend $9,700 to stop the county tax foreclosure, then foreclose ourselves, we will then sell the property and recover all costs and the unpaid dues.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 3:37 PM
TimB, how can I get in touch with you?

First, you should know that I am not an attorney and I do not work in the legal profession.
My opinions and advice are based on what you post, my personal experiences, any research that I do and, hopefully, some common sense. If any of those things change, the advice may change.

If you want to contact me, I can be reached via e-mail: [email protected]

As the e-mail indicates, this is a an e-mail I check when I am at work (one of the compromises I made with my wife since becoming involved in our HOA). Since this is a three day weekend, I won't be checking it until Tuesday.

However, do feel free to contact me. If I can help I will. If I can't I'll tell you that as well.

KarenC15 (Florida)
Posts: 118

Posted:

I would contact your state board that issues Community Association licenses, if you have a licensed manager. Ask if the fee is out of line with the state statutes and, if so, make a formal complaint. Make a complaint with the better business bureau in your state against the PM company. If you feel that it is related to a bias against you because of ethnicity, disability, family status, etc.; report it to HUD/Office of Human Rights. Finally, hire a lawyer. First thing is to check the VA state statutes because it will likely limit charges for copying. I don't know about legal fees but I would ask about disclosure before posting any proprietary information online or elsewhere. Some things are private. Best of luck and thank you for pushing back. An HOA should maintain the property and represent members in good faith. Some people get carried away when they have never had any power or money to manage and it seems to go to their heads. It's a shame.

Hatred is contagious, so one should work to avoid it.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By TimB4 on 08/30/2013 2:34 PM

Posted By ShashiA1 on 08/30/2013 2:06 PM

So I asked, why is the board budgeting $70k to recover $30k which are already in collections.

Excellent question.

Sometimes Boards are human also and get into a defensive posture to where they just won't back down. Sometimes they allow the attorney to do the thinking for them. It's sad when either case occurs.

The way to resolve this issue is to do your homework and gather support to either make the board listen or simply recall them and replace them with those who will listen.

You may want to gather support and call for a special membership meeting to vote on continuing this legal action or simply write the bad debt off. This will at the very least make the Board listen to the members. They might not want to answer their questions (and the attorney may even recommend that they don't) but at least the membership will have their say.

Tim we do not have enough information here. The Board could very well be acting well within the interests of the association by levying a special assessment for further collection actions.

I dealt with see same thing just 1 week ago at a Board meeting by a member.

One member was disgusted about the idea we might have to levy a special assessment on paying members to raise enough money to pursue foreclosures on non-paying members. He does not want to pay more. Duhhhh... Neither do I... But we ALREADY pay more in dues as 30% of the owners here have simply refused to pay anything in the past.

One hour later at the same Board meeting, discussions involved other budget items like re-roofing the clubhouse. The same member then suggested we pursue the delinquent owners to raise more money for these other operations.

*facepalm*

I looked at him and asked, well since he doesn't want us to raise money for foreclosures perhaps he would be willing to "crack some knee-caps for us" to collect from the deadbeats. He shut up and we didn't hear a peep out of him after that. He realized the ridiculousness of his position and statements.

Some people simply do not get it. No matter how much you explain it to them. Pursuing delinquent owners involves more than the Board waiving their magic wands. HOAs only have a few collection options and they ALL cost money.

JeanneK3 (Maryland)
Posts: 562

Posted:

Thank God I'm not in Washington. Maryland just passed a law that limits attorney fees in a foreclosure to no more that the amount owed the association. Attorneys here have used these actions as an excuse to inflate fees. You need a similar law in Washington.

Jeanne

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JeanneK3 on 08/30/2013 5:07 PM
Thank God I'm not in Washington. Maryland just passed a law that limits attorney fees in a foreclosure to no more that the amount owed the association. Attorneys here have used these actions as an excuse to inflate fees. You need a similar law in Washington.

Jeanne

Jeanne

If limited to only what the association is owed, how does the attorney get paid to do such? Why would they take such a case on?

Not disagreeing, but it does not make sense to me. Are you sure that is what the law says?

JM10 (California)
Posts: 503

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 1:12 PM
because I sent them a letter requesting access to inspect the HOA documents. Southern Walk at Broadlands HOA, Virginia, is very secretive in their work. They do not like homeowners asking questions. This is a second HOA for us and its responsibility is only to manage the telecommunications contract. They main HOA manages the common areas and they are very responsible.

In response to my request, they sent me non-disclosure agreement to sign. According to them, all their documents are "confidential" and any leaks would cause them "damage". This NDA is followed by a letter asking me to pay $580 for copying nearly 220 pages of minutes docs. This fees includes $75/hr charge for 6 hours for copying. And it was followed by $1,510 bill for legal fees. I presume their claim is, they spend over $1,500 in legal fee responding to my request.

There was no explanation given for the charges, nor I was give any notice of hearing before levying the charges.

Funny thing is, they charged my account on August 1st, and mailed a notice on August 14th claiming the due date as August 13th. I have already received a late notice.

Obviously, this HOA is trying to intimidate from asking questions and disqualify me from attending the meetings.

I will post the documents as needed.

Any suggestions on how to handle the HOA.

Okay...I'm not in a legal profession, but I've been to small claims court a few times too many. Judges like things to make sense.

Your board charged you fees that seem unreasonable without telling how much the fees were and that it would involve legal fees. They then posted the charge before they notified you and added a late charge.

Meeting minutes should be readily available. There should be an option for you to visit someone and be able to look at the documents. In this day and age, they should also be able to simply email the documents or give you a PDF file. This would mean no copying charges.

Check and see if production of documents can be handled by small claims court. This is what we did in order to get documents. We went twice. The board lost both times.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By TimB4 on 08/30/2013 4:22 PM

Posted By ShashiA1 on 08/30/2013 3:37 PM
TimB, how can I get in touch with you?

First, you should know that I am not an attorney and I do not work in the legal profession.
My opinions and advice are based on what you post, my personal experiences, any research that I do and, hopefully, some common sense. If any of those things change, the advice may change.

If you want to contact me, I can be reached via e-mail: [email protected]

As the e-mail indicates, this is a an e-mail I check when I am at work (one of the compromises I made with my wife since becoming involved in our HOA). Since this is a three day weekend, I won't be checking it until Tuesday.

However, do feel free to contact me. If I can help I will. If I can't I'll tell you that as well.

Thanks, Tim. I understand the limitations, but still I would like to talk to you. I would like to benefit from your experience and knowledge. Next week is fine. I will send and email over the weekend.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Also there are no other liens or mortgages on this property. So this is a low risk foreclosure for our HOA.

Foreclosing on a property with no mortgage or liens? Extremely rare. Good example, but I rarely ever see it in real life.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 1:12 PM
because I sent them a letter requesting access to inspect the HOA documents.

You asked to inspect records, which is covered by law for you to do. They responded with copies of over 220 pages which you did not ask for. You only asked to view the records. I would say you're not responsible for any of it. The HOA made an error.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By GnomeX on 08/30/2013 4:08 PM

I have a question for you SashiA1. How many Board meetings have you attended? Do you know what has been discussed at the Board meetings?

You say these properties are already in "collections". What does mean? Is it concerning foreclosures? My guess is current collection actions are not working and your Board is having to step up to the next level to collect. Most likely foreclosures.

It is NOT unreasonable to pay MORE in collection costs than what is owed in delinquent dues. Let me give you an example. We have one property owner we absolutely have to foreclose on before Nov of this year. The owner owes the HoA $1,100 in unpaid dues going back several years. Worse the owner stopped paying property taxes 3 years ago as well. The owner is now facing County foreclosure. Total back taxes and county foreclosure costs currently owed by this owner is $4,700. The property is up for public auction in Nov. Our HOA absolutely MUST pay these back taxes or the County tax foreclosure will wipe out our lien. Also there are no other liens or mortgages on this property. So this is a low risk foreclosure for our HOA.

Once our HoA pays this owner's back taxes, we then will have to use our attorney to file a foreclosure to collect the $1,100 in unpaid dues.

So what will it cost us the HoA to collect the $1,100 in unpaid dues?

$4,700 Unpaid property taxes (plus penalties) to stop the County tax foreclosure
$5,000 Legal fees for HoA to foreclosure (estimate per our attorney)
----------
$9,700 TOTAL HOA COSTS to foreclosure

So we MUST spend around $9,700 to collect $1,100 in unpaid dues. Is that unreasonable? In this case no. It is very reasonable.

Once our HOA forecloses, we will then sell the property to recoup not only the $1,100 in unpaid dues but also the $9,700 in legal fees and back property taxes we paid.

So yes, it is not unusual at all to pay MORE in costs to collect on unpaid dues.

I do not want to sound mean or demeaning, but what people like you have to understand is that you are often coming from a position of inferior knowledge. People like you often have no knowledge of all the legal aspects like lien priority in regards to collections and see something like $70K costs to collect on $30K unpaid dues and just jump to the conclusion that it is a waste of money. I even have had Board members that do not understand things like lien priority.

Just in this above case I am dealing with now, we will spend nearly 10 times as much to collect a $1,100 debt. If we DO NOT ACT, we will lose the opportunity to collect that $1,100. If we do NOT act, we will lose $1,100. If we spend $9,700 to stop the county tax foreclosure, then foreclose ourselves, we will then sell the property and recover all costs and the unpaid dues.

This is not a regular HOA which manages common areas and such. They manage the telecommunications contract for the community. Delinquent accounts are in collections, no issues with the properties themselves. The the monthly assessments for triple play telecommunications services (TV, Telephone and Internet) are not paid hence in collections. So, your example does not apply here.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Shashi

The more you explain, the more it seems you have put your nose in the middle on an ongoing legal battle. I think they are simply playing hardball by saying the documents you have requested will have to be reviewed, redacted, etc. all in the name of privacy and as such the requested docs will cost $2.35 per page plus additional legal document charges.

It is an attempt (and probably a proper legal one) to blow you off.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By JohnC46 on 08/31/2013 6:03 AM
Shashi

The more you explain, the more it seems you have put your nose in the middle on an ongoing legal battle. I think they are simply playing hardball by saying the documents you have requested will have to be reviewed, redacted, etc. all in the name of privacy and as such the requested docs will cost $2.35 per page plus additional legal document charges.

It is an attempt (and probably a proper legal one) to blow you off.

John,

I am interested to know what legal grounds do you think they have to charge me legal fees for requesting access to HOA documents which are guaranteed by the law?

Thanks

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Quote:

I am interested to know what legal grounds do you think they have to charge me legal fees for requesting access to HOA documents which are guaranteed by the law?

If the fee is the time it took the person to put the documents together for you, its allowable to pass this along to the person requesting the docs. Maybe the HOA's lawyer holds all the docs. I duno. The only person who can explain the charges to you is the person you requested the docs from. We are just guessing. Even then, if it went to court, a judge would probably say the cost is too high, but its up to you how far you want to take it.

KevinK7 (Florida)
Posts: 1,343

Posted:

For clarification, did you request copies to the records or just access? And if access, did they go ahead and copy record and bill you the amount without disclosing their actions or costs?

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By SteveM9 on 08/31/2013 6:58 AM

I am interested to know what legal grounds do you think they have to charge me legal fees for requesting access to HOA documents which are guaranteed by the law?

If the fee is the time it took the person to put the documents together for you, its allowable to pass this along to the person requesting the docs. Maybe the HOA's lawyer holds all the docs. I duno. The only person who can explain the charges to you is the person you requested the docs from. We are just guessing. Even then, if it went to court, a judge would probably say the cost is too high, but its up to you how far you want to take it.

This HOA does not have a brick-n-mortor office of its own. Documents are held at the management companies office. The offer to give me the copies of the documents at $585 came from the management's office. I am not complaining about that charge, it is subjective matter. I know I have to pay a "reasonable charge" for the copies. Actually, I am going to request them to make the documents available for visual inspection. Can the HOAs charge for visual inspection also?

My main complaint is about
1. They still want me to sign Non-Disclosure Agreement.
2. $1510 legal fees.

There was not explanation of the Legal Fee nor was I was given any advance notice either the fee or hearing. During a monthly meeting when I was present, the board voted to charge a certain account number that fees. At that time, I did not recognize the fact that the account number was mine.

Do you see any validity of either of those.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By KevinK7 on 08/31/2013 7:38 AM
For clarification, did you request copies to the records or just access? And if access, did they go ahead and copy record and bill you the amount without disclosing their actions or costs?

Asked for copies with an option to make the docs available for visual inspection. I am going to write to me to make the docs available for visual inspection at which time I will choose the docs which I need to be copied if any.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By KarenC15 on 08/30/2013 4:29 PM
I would contact your state board that issues Community Association licenses, if you have a licensed manager. Ask if the fee is out of line with the state statutes and, if so, make a formal complaint. Make a complaint with the better business bureau in your state against the PM company. If you feel that it is related to a bias against you because of ethnicity, disability, family status, etc.; report it to HUD/Office of Human Rights. Finally, hire a lawyer. First thing is to check the VA state statutes because it will likely limit charges for copying. I don't know about legal fees but I would ask about disclosure before posting any proprietary information online or elsewhere. Some things are private. Best of luck and thank you for pushing back. An HOA should maintain the property and represent members in good faith. Some people get carried away when they have never had any power or money to manage and it seems to go to their heads. It's a shame.

Karen,

Yes, we have a management company.

This management company mailed ma Statement of Account on August 14th, 2013. In the Statement of Account, I see, the management company has charged the legal fees on August 1, 2013 and the due date for the payment is August 13th, 2013, which is same as the date of the Statement itself. IOW, they have mailed me the statement after the due date is passed.

And they already mailed me the late notice dated August 20th.

For sure, they are in a hurry for something. I am sure they have bypassed their own standard billing procedures here. Maybe, in addition to BBB, I can also complain to this management agent's head office. Its a nationwide company.

I am not clear about your first suggestion, contacting the licensing issuing authority of Community Associations. Can you pl. elaborate on it.

KarenC15 (Florida)
Posts: 118

Posted:

In FL, Community Association Managers must pass a licensing exam for certification which is issued by the state (similar to licensing a cosmetologist or real estate agent). We have a complaint process here for a licensed individual who is not following the laws governing their profession. I don't know if your situation meets that standard, but you could contact the state department that issues licenses to ask. Unfortunately, another poster noted on a separate thread that many states apparently do not license Community Association Managers, so it may not be available to you -- but check nevertheless. Since it is national, the Better Business Bureau might help you negotiate something if they will not work with you. Good luck.

Hatred is contagious, so one should work to avoid it.

JeanneK3 (Maryland)
Posts: 562

Posted:

John:
Here's the answer to your question. This was just passed this year.

HB 286, Foreclosure of Liens: This consumer protection law will limit attorney fees during the foreclosure of a lien to only an amount equal to the delinquent assessments. If the association does allow excessive legal fees to be part of a lien, this money can only be collected when the property changes hands. The law also prohibits foreclosure on any property based only on fines and/or legal fees owed.

Jeanne

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By ShashiA1 on 08/31/2013 8:25 AM

Posted By SteveM9 on 08/31/2013 6:58 AM

I am interested to know what legal grounds do you think they have to charge me legal fees for requesting access to HOA documents which are guaranteed by the law?

If the fee is the time it took the person to put the documents together for you, its allowable to pass this along to the person requesting the docs. Maybe the HOA's lawyer holds all the docs. I duno. The only person who can explain the charges to you is the person you requested the docs from. We are just guessing. Even then, if it went to court, a judge would probably say the cost is too high, but its up to you how far you want to take it.

This HOA does not have a brick-n-mortor office of its own. Documents are held at the management companies office. The offer to give me the copies of the documents at $585 came from the management's office. I am not complaining about that charge, it is subjective matter. I know I have to pay a "reasonable charge" for the copies. Actually, I am going to request them to make the documents available for visual inspection. Can the HOAs charge for visual inspection also?

My main complaint is about
1. They still want me to sign Non-Disclosure Agreement.
2. $1510 legal fees.

There was not explanation of the Legal Fee nor was I was given any advance notice either the fee or hearing. During a monthly meeting when I was present, the board voted to charge a certain account number that fees. At that time, I did not recognize the fact that the account number was mine.

Do you see any validity of either of those.

I have to read the laws or your governing documents but it sounds as if they decided to arbitrarily charge your account a bogus fee. I would like to know their reasoning behind the charge but it sounds unwarranted.

As for the non-disclosure, if the law states you are allowed unrestricted access then I would refuse to sign and respond with my own attorney. I would also disseminate the information received to all my neighbors. The law allows transparency and their stunt sounds fishy. If they are trying to prevent access (by charging exorbitant fees) or information getting out maybe they are trying to hide something.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By JeanneK3 on 08/30/2013 5:07 PM
Thank God I'm not in Washington. Maryland just passed a law that limits attorney fees in a foreclosure to no more that the amount owed the association. Attorneys here have used these actions as an excuse to inflate fees. You need a similar law in Washington.

Jeanne

No we do NOT need a similar law. Laws like that will have the unintended consequence of creating more delinquency problems and/or undue costs being eaten by the HOA and thus the paying members. Especially in HOAs like ours where the annual dues are so low.

An example: Our dues are $200 a year and our attorney has stated each foreclosure will cost $5,000 for his time. We also have a 6 year statute of limitation of debt here.

What will happen? A non paying member of 6 years will owe a debt of $1,200. Anything older than 6 years we cannot legally collect.

So we spend $5,000 in attorney fees to collect $1,200 in dues. But this law will cap us at only being able to charge the deadbeat $1,200 in attorney fees to match the $1,200 owed in dues and the HOA will end up eating $3,800 in attorney legal fees.

Who will cover the other $3,800 in attorney legal fees? The paying members of the association and not the deadbeats.

However this will not be a problem for associations with higher annual dues where the arrears quickly reach the attorney fees for a foreclosure. But for associations with small annual dues, a law like this could be financially devastating to them.

No I am sorry. We do NOT need laws like this as it will end up burdening the paying members in associations with low annual dues. This law will empower deadbeats and create MORE financial hardship on paying members as they will end up eating the attorney fees and not the deadbeats where it properly belongs. I would only be in favor of such a law should it take into account associations such as our with low annual dues.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By ShashiA1 on 08/30/2013 1:39 PM
Thanks Glen.

I went thru the Virginia Code from the websites you listed. Did not find anything to support what the HOA board is doing.

Actually you need to re-read those VA State statutes specifically this one:

§ 55-510. Access to association records; association meetings; notice.

"D. Prior to providing copies of any books and records to a member in good standing under this section, the association may impose and collect a charge, reflecting the reasonable costs of materials and labor, not to exceed the actual costs thereof."

If the HOA can show that your document requests cost the association those actual costs in labor and materials, you might not have a leg to stand on. The question is can they also tack on the legal fees that such a document request might entail as they are in pending litigation?

If I were you I would consult with an attorney BEFORE doing ANYTHING else. Let me stress that.

If I were you I would consult with an attorney BEFORE doing ANYTHING else.

If the HOA is in the right, and you incur more charges by more document requests, you could be digging yourself a deep financial hole you wish had never started digging to begin with.

Also there is this to consider. You state the HOA is in a lawsuit.

§ 55-510. Access to association records; association meetings; notice.

"C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:

3. Pending or probable litigation. Probable litigation means those instances where there has been a specific threat of litigation from a party or the legal counsel of a party;"

My guess is they want the NDA because of the lawsuit. Should you start leaking those documents and it damages the HOA.

Again, if it were me, I wouldn't continue poking a hornet's nest until I spoke with an attorney. There could be other state laws allowing an NDA.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By KarenC15 on 08/31/2013 9:33 AM
In FL, Community Association Managers must pass a licensing exam for certification which is issued by the state (similar to licensing a cosmetologist or real estate agent). We have a complaint process here for a licensed individual who is not following the laws governing their profession. I don't know if your situation meets that standard, but you could contact the state department that issues licenses to ask. Unfortunately, another poster noted on a separate thread that many states apparently do not license Community Association Managers, so it may not be available to you -- but check nevertheless. Since it is national, the Better Business Bureau might help you negotiate something if they will not work with you. Good luck.

This website says Virginia requires licensing.
http://www.houselogic.com/home-advice/home-thoughts/hiring-hoa-manager-what-consider/

Would it be possible for me to have an offline conversation with you on this subject?
I can be reached at arjun2k7 at gmail dot com.

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By GnomeX on 08/31/2013 2:44 PM

Posted By ShashiA1 on 08/30/2013 1:39 PM
Thanks Glen.

I went thru the Virginia Code from the websites you listed. Did not find anything to support what the HOA board is doing.

Actually you need to re-read those VA State statutes specifically this one:

§ 55-510. Access to association records; association meetings; notice.

"D. Prior to providing copies of any books and records to a member in good standing under this section, the association may impose and collect a charge, reflecting the reasonable costs of materials and labor, not to exceed the actual costs thereof."

If the HOA can show that your document requests cost the association those actual costs in labor and materials, you might not have a leg to stand on. The question is can they also tack on the legal fees that such a document request might entail as they are in pending litigation?

If I were you I would consult with an attorney BEFORE doing ANYTHING else. Let me stress that.

If I were you I would consult with an attorney BEFORE doing ANYTHING else.

If the HOA is in the right, and you incur more charges by more document requests, you could be digging yourself a deep financial hole you wish had never started digging to begin with.

Also there is this to consider. You state the HOA is in a lawsuit.

§ 55-510. Access to association records; association meetings; notice.

"C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:

3. Pending or probable litigation. Probable litigation means those instances where there has been a specific threat of litigation from a party or the legal counsel of a party;"

My guess is they want the NDA because of the lawsuit. Should you start leaking those documents and it damages the HOA.

Again, if it were me, I wouldn't continue poking a hornet's nest until I spoke with an attorney. There could be other state laws allowing an NDA.

The key words are not "material and labor" but "reasonable
costs.". Charging $75/hr for copies is a bit excessive.

As or the Non Disclosure Agreement, the key word is "specific threat.". They would have to identify a specific threat of litigation and either release or withhold information - not require non-threatening information to remain secret. That is not the intent of the law. The law also says the threat is from a party. If I recall the poster mentioned the HOA was the party seeking litigation, not the target of.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By KevinK7 on 09/01/2013 12:22 AM

The key words are not "material and labor" but "reasonable
costs.". Charging $75/hr for copies is a bit excessive.

That is your subjective opinion of what is excessive. The OP has stated these HOA records are held at the management company's office.

The lowest rate management company that we are thinking of going with also charges similar labor rates above their base flat rate outside the contract terms. Since the OP has stated those records are held by the management company, and if that is the labor rate the management company charges, they might very well be termed reasonable by the courts.

Quote:
Posted By KevinK7 on 09/01/2013 12:22 AM
As or the Non Disclosure Agreement, the key word is "specific threat.". They would have to identify a specific threat of litigation and either release or withhold information - not require non-threatening information to remain secret. That is not the intent of the law. The law also says the threat is from a party. If I recall the poster mentioned the HOA was the party seeking litigation, not the target of.

Kevin I'm fairly certain you are misreading that statute regarding pending and probable litigation.

The clause you mention is regarding "a definition" of PROBABLE litigation. Re-read the statute. Every word.

"C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:

3. Pending OR probable litigation. Probable litigation means those instances where there has been a specific threat of litigation from a party or the legal counsel of a party;"

Regardless of whether there is "pending" or "probable" litigation, "specific threat", who is the target etc. is all a moot point. The HOA is currently in a lawsuit per the OP.

KevinK7 (Florida)
Posts: 1,343

Posted:

I did miss the "or" in that sentence but I would still argue that just because $75/hr is comparable to other management rates doesn't make it reasonable. Without offering any alternatives the HOA is essentially holding the records hostage. And if the information is sensitive enough to pending litigation then they could refuse in accordance with the law.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By GnomeX on 08/31/2013 2:44 PM
Posted By ShashiA1 on 08/30/2013 1:39 PM
Thanks Glen.

I went thru the Virginia Code from the websites you listed. Did not find anything to support what the HOA board is doing.

§ 55-510. Access to association records; association meetings; notice.

"C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:

3. Pending or probable litigation. Probable litigation means those instances where there has been a specific threat of litigation from a party or the legal counsel of a party;"

My guess is they want the NDA because of the lawsuit. Should you start leaking those documents and it damages the HOA.

Again, if it were me, I wouldn't continue poking a hornet's nest until I spoke with an attorney. There could be other state laws allowing an NDA.

Glen, you underlined the wrong part of this provision.

C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:
Then it goes on to list 9 specific type of information which can be with held.

For example, first 2nd item is:
2. Contracts, leases, and other commercial transactions to purchase or provide goods or services, currently in or under negotiation;

From your interpretation, HOA can shut itself from the community it it has any contract with a third party currently in effect or under negotiation.
The correct interpretation is, HOA need not release information specific to the contracts in effect or under negotiation.

Similarly, the information about current or pending litigation need not be released. Thats all.

HOA offered to release Minutes of the meetings, but at an exorbitant cost, $1500 in legal fees, NDA AND $600 copying fees.
Litigation discussions are always held in executive sessions and they are documented in the minutes. That is the reason HOA agreed to to release the minutes.

So, lets focus on the real issues here. $1500 legal fee, NDA and lastly cost of copying.

ShashiA1 (Virginia)
Posts: 18

Posted:

In the previous message, I was responding to GnomeX not Glen. Sorry for the typo.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By ShashiA1 on 09/01/2013 5:40 AM

Glen, you underlined the wrong part of this provision.

C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:
Then it goes on to list 9 specific type of information which can be with held.

For example, first 2nd item is:
2. Contracts, leases, and other commercial transactions to purchase or provide goods or services, currently in or under negotiation;

From your interpretation, HOA can shut itself from the community it it has any contract with a third party currently in effect or under negotiation.
The correct interpretation is, HOA need not release information specific to the contracts in effect or under negotiation.

The "correct interpretation"? Or do you mean "your interpretation"...

Don't ignore the fact they can withhold documents if it concerns litigation.

Quote:
Posted By ShashiA1 on 09/01/2013 5:40 AM

HOA offered to release Minutes of the meetings, but at an exorbitant cost, $1500 in legal fees, NDA AND $600 copying fees.
Litigation discussions are always held in executive sessions and they are documented in the minutes. That is the reason HOA agreed to to release the minutes.

So, lets focus on the real issues here. $1500 legal fee, NDA and lastly cost of copying.

$1,500 in legal fees. Sounds excessive to you. That is subjective. Most attorneys in my area charge $280 an hour. That would be around 5 hours labor for an attorney.

Cost of copying seems to be $75 per hour per your management company. Sounds excessive to you. Again that is subjective. You paid $600. Looks like it took someone or somebodies a total 8 hours labor at the management company to meet your request.

Are they padding the costs in excess of what the HOA incurred to meet your request? Just looking at the labor time, probably not. Can they prove in court the HOA actually incurred those costs and were billed accordingly by outside agencies? Might very well be the case. Will a court deem it reasonable costs of labor and materials? Could very well happen.

Do I know for sure. No. But I would tread carefully if I were you.

Take this from someone who has been on BOTH sides of this type of thing. I as a paying member REMOVED an entire Board 3 years ago which was outright refusing to release ANY documents whatsoever which is ILLEGAL in the state of Washington. And now as a Board member and Treasurer of same HOA am having to deal with numerous people affiliated with that removed Board requesting copies essentially of the entire office going back 3 years. They want everyone else to eat the labor costs of their fishing expedition and to overly burden the Board in retaliation for their removal from office.

You yourself already stated your HOA is currently in a lawsuit.

I don't want to sound mean or demeaning but people like you cost associations money when they have to go to an attorney or pay someone to meet your requests. Who should bear those costs? Associations have just two options in these cases. They can pass the costs off onto the other paying members or they can pass those costs off onto the person making the request.

Now you probably don't like hearing this which is understandable. However I am merely pointing out they could very well be acting within the law.

Which is why I said before and will say it again, if it were me, before I proceeded any further, I would be getting the advice of an attorney before I incurred any more costs.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By KevinK7 on 09/01/2013 4:53 AM
I did miss the "or" in that sentence but I would still argue that just because $75/hr is comparable to other management rates doesn't make it reasonable. Without offering any alternatives the HOA is essentially holding the records hostage. And if the information is sensitive enough to pending litigation then they could refuse in accordance with the law.

Yeah that is a problem. But what is the alternative and at what expense?

Have two sets of records? One at an HOA office and one at the management company? In this case the OP said the HOA doesn't even have an office.

KevinK7 (Florida)
Posts: 1,343

Posted:

Quote:

Posted By GnomeX on 09/01/2013 4:11 PM
Posted By KevinK7 on 09/01/2013 4:53 AM
I did miss the "or" in that sentence but I would still argue that just because $75/hr is comparable to other management rates doesn't make it reasonable. Without offering any alternatives the HOA is essentially holding the records hostage. And if the information is sensitive enough to pending litigation then they could refuse in accordance with the law.

Yeah that is a problem. But what is the alternative and at what expense?

Have two sets of records? One at an HOA office and one at the management company? In this case the OP said the HOA doesn't even have an office.

I don't think two sets are necessary. I would think that there is a reasonable expectation that some homeowners will want to inspect records and those records should either be made available for copies (at a reasonable cost) or for physical inspection for free. It is a part of business and if the management is so concerned with cost or inconvenience they should work out compensation with the HOA in their contract.

GnomeX (Washington)
Posts: 253

Posted:

Quote:

Posted By KevinK7 on 09/01/2013 4:50 PM
Posted By GnomeX on 09/01/2013 4:11 PM

Posted By KevinK7 on 09/01/2013 4:53 AM
I did miss the "or" in that sentence but I would still argue that just because $75/hr is comparable to other management rates doesn't make it reasonable. Without offering any alternatives the HOA is essentially holding the records hostage. And if the information is sensitive enough to pending litigation then they could refuse in accordance with the law.

Yeah that is a problem. But what is the alternative and at what expense?

Have two sets of records? One at an HOA office and one at the management company? In this case the OP said the HOA doesn't even have an office.

I don't think two sets are necessary. I would think that there is a reasonable expectation that some homeowners will want to inspect records and those records should either be made available for copies (at a reasonable cost) or for physical inspection for free. It is a part of business and if the management is so concerned with cost or inconvenience they should work out compensation with the HOA in their contract.

But what you are overlooking is none of this is free.

Making copies, someone has to be paid for the labor. Even with inspection, someone has to pull the documents and someone has to be paid to oversee the inspection of such records. You cannot just let any tom dick and harry inside a room to have free reign of corporate documents.

Businesses including HOAs are not here to provide you something for free. Including document requests.

Someone is going to incur these costs.

This whole "reasonable cost" argument is nothing more than people wanting to DICTATE, from their subjective opinion, of what these costs should be.

BTW we now have two personal friends of former Board members (whom the community removed from office BTW) wanting copies of everything in our office going back 3 fiscal years. They want me to make the copies. They want ME to personally spend the next month as an unpaid volunteer to make these copies for them. Would you sit here and tell me that I should do that? I should basically quit MY LIFE to entertain their fishing expedition. NO but HELL NO.

We will have to keep our current temp employee at $20 an hour to sit in the office making thousands of copies for the next month. Who should bear the cost? Surely the temp isn't going to work for free. No these people want our community to bear the costs or they want me to do it for free. Not going to happen.

They will get their documents per the law and they will get the bill for it per the law. Now THAT is reasonable.

You are NOT entitled to anything you are not WILLING to pay.

ShashiA1 (Virginia)
Posts: 18

Posted:

Quote:

Posted By KevinK7 on 09/01/2013 12:22 AM

The key words are not "material and labor" but "reasonable
costs.". Charging $75/hr for copies is a bit excessive.

As or the Non Disclosure Agreement, the key word is "specific threat.". They would have to identify a specific threat of litigation and either release or withhold information - not require non-threatening information to remain secret. That is not the intent of the law. The law also says the threat is from a party. If I recall the poster mentioned the HOA was the party seeking litigation, not the target of.

Thats right. HOA is seeking relief from the Telecommunications service provider.
And, we recognize that discussions between the Board and its legal counsel is privileged information which HOA need not reveal.

ShashiA1 (Virginia)
Posts: 18

Posted:

FYI:

Filed a Warrant-of-Debt in the County District Court against the HOA for the legal fees they charged me. Judge awarded me the money with interest.

In his ruling Judge said that HOA cannot charge a me the expense of drafting Non-Disclosure Agreement, it has to be charged to all members of the HOA.

BobD4 (up north)
Posts: 1,002

Posted:

so the court ( ? a form of small claims civil ? ) did not set aside - or was not asked to set aside - direct copying charges of $2.64 per page ( $580 - 220 pages ).

But you report that it DID set aside the separate, indirect, collateral Act-compliancing charges actually incurred : doing our duty charge including a non-disclosure agreement that could be used for all owners in future.

ShashiA1 (Virginia)
Posts: 18

Posted:

Chose not to go the Small Claims Court route. Instead file my claim for $1500+ HOA charged me in the County District court.

After hearing the arguments, which lasted for about 3 hours, the court agreed with our position that HOA cannot charge me (an individual homeowner) for the legal fees they incurred addressing my request for the inspection of association documents which included drafting of the NDA.

Whether HOA can demand an execution of NDA before allowing inspection of documents is a completely different subject which is not addressed in our case. Virginia Law clearly states that the Associations cannot place restrictions on the members right to access the documents.

Our case did not involve cost of copying.

so the court ( ? a form of small claims civil ? )

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By ShashiA1 on 11/12/2014 9:13 AM
FYI:

Filed a Warrant-of-Debt in the County District Court against the HOA for the legal fees they charged me. Judge awarded me the money with interest.

In his ruling Judge said that HOA cannot charge a me the expense of drafting Non-Disclosure Agreement, it has to be charged to all members of the HOA.

Sashi,

Thank you for the update. I believe that everyone on this site would have agreed with the judge that the cost of writing up the non-disclosure agreement was not a cost of giving you access to the records.

Too bad the question of the need for a non-disclosure agreement wasn't part of the issue.

I personally believe that the non-disclosure agreement was not warranted. However, if you did sign it, it would be a contract and you would be bound to the terms of it. Therefore, in my layman's opinion, do not violate it without prior consultation with an attorney.