Association Lawyers Fees

I am in New Jersey and I would like to find the regulation or restrictions in the State law against the HOA lawyers fees against the Condo owners or any post judgment lawyer fees etc. How does a homeowner control the actions of an HOA lawyer's association from milking the fees of the association and the homeowner's from the administrative work like collecting back HOA Fees and liability insurance claims handled by the insurance company.

There’s a lot of emotional language in your question (which adds nothing to the discussion) so let’s start with the basics. First, what do you mean by the attorney’s “milking the fees of the association and the homeowners from the administrative work like collecting back HOA fees and liability insurance claims handled by the insurance company?” You don’t explain what you mean by post judgement lawyer fees either.

Attorneys don’t work for free – phone calls, legal research, court filing fees, drafting all sorts of legal documents, all take time and money, and the longer the legal matter persists the more expensive it gets. That’. As a former Board treasurer, I can also tell you there could be additional costs in collecting delinquent assessments like garnishing wages or rent (if the owner is renting out the home), skip tracing (if the owner has disappeared), dealing with bankruptcies and all that.

You didn’t say if you’re on the board – if you are, ask for an itemized list of charges related to what the attorney did for each legal matter you asked him/her to address on the association’s behalf. When associations hire attorneys, they should ask for a list of charges so they’ll have an estimate as to what it’ll cost to pursue someone for delinquent fees, represent the association in a lawsuit, etc. In my community, we sign a letter of engagement with our attorney every year, which includes a schedule of charges. We also get a certain number of hours we can use to ask questions at no charge. One person was designated the primary contact (either the president or treasurer) and we would usually discuss contacting the attorney at a board meeting before we did it so everyone would know what was up when that expense showed up on next month’s income/expense report. Most times, we saved money by discussing the matter carefully and checking our documents, finding the answer in there, which saved a phone call or email.

Our community’s collection policy also states delinquent homeowners also have to reimburse the association’s court costs, attorney’s fees and other collection costs related to collecting the debt. If you don’t have a similar policy in your community, you might want to start by enacting one – sometimes the prospect of paying delinquent fees, late fees and all those collection costs are enough to encourage deadbeats to stop it before it starts.

Finally, some of you won’t like my usual response to legal questions, but here it is again – if you want answers to legal questions, you need to hire an attorney. We aren’t lawyers and what’s true in my state isn’t necessarily true in yours. If you feel your attorney is billing for stuff you didn’t get or is unwilling to discuss costs with you, it may be time to hire someone who will. Depending on the situation, you might also be able to file a complaint with your local bar association.

In New Jersey there is an over supply of lawyers. You even see Billboard advertisements for lawyers in the Highways and they need clients. There are administrative duties that can be handled by some volunteer homeowners and Board members that do not have to be given to the lawyers because many times the paralegals or their administrative clerks expedite the transactions but charges their regular legal fees.
No matter how you want to do this, there is always Director's and Officer's insurance liability to protect the Board Members and the property management company carry insurance to protect their Errors and Omission Liability Insurance, however it is cumbersome for the homeowner to deal with a hired law firm that the HOA uses because it's used by several HOA's by property management companies.
How do I start a coalition to control the lawyer's fees that are charged by these law firms that expedite administrative work for the HOA Association.

I'm confused by your question. Are you trying to reduce the money your HOA spends on attorneys or are you trying to reduce the rates the attorneys charge. My HOA has very low attorney fees because we very rarely use an attorney and we are in New Jersey. The Board controls what services they buy from an attorney and they should be agreeing to the cost or at least an hourly cost and a not to exceed cost before any work is done or cost incurred. Also you should know what you will be charged based on who in the firm is doing the work.

Marissa, the path to correct this is long. You have to elect a board majority who sees this as you do. This means the awful work of, for example, obtaining the contact information for all members; sending mailings to them; creating a web site; pounding the pavement; and being cheerful and enthused at all times about electing a new board. Also many boards are ego-drive and uneducated. The Board may attack you with lies. Because it will be campaign season, they will get away with the lies.

For owners who are in arrears, I agree that settlement is often a less expensive way to collect, rather than spending money on an attorney. Not always, but often. Sometimes going after the person who owes the most, using a collections attorney, gets the word out to other members who are in arrear. They start paying up. The HOAs where I have lived usually use a collections attorney who is different from the HOA's general counsel. It is such a specialized legal job that the HOAs found this more cost-efficient.

Am I the only one not seeing anything wrong here? Reality is that your HOA board goes to a lawyer to enforce it's rules. That costs money. Which comes from the HOA's budget. The very same budget every members dues goes into. When they pay for the legal expenses out of that budget it comes out of every members pockets. So would you not want them to be able to collect that money back? Do you not want them to legally enforce violations or non-payers? It cost money and it's not what you think it should be.

Now does it mean your board isn't knee jerk reacting and running to a lawyer? No. However, they aren't professionals. Their only qualification is to be a home owner. So what do they know about legal options except to pay a professional?

It sounds like an endless loop your HOA has gotten itself into. The violating owners are most likely threatening the HOA with lawsuits, not paying, or responding with their own legal options. The HOA in turn is forced to go get legal advice or action by a lawyer. They do so knowing that the lawyers are advising them that any costs they incur is to be compensated by the other party. So what do they have to lose by getting/paying for so much legal advise/actions?

If your goal is to reduce these expenses, then need to have people on the board who don't knee jerk react to a lawyer. Contact with lawyers should be limited and only 1 board member allowed to represent the HOA to the lawyer. This reduces confusion, communication costs, and narrows down the services.

My HOA was lucky as that I took a few legal courses in college. So knew how to deal with lawyers. I was able to limit our legal expenses that way. Never knee jerked reacted. Only used the legal services as a "tool". A lawyer was for placing liens/foreclosure something we could not do legally. Otherwise, everything else was handled by us.