Recouping Legal Fees

Suing your HOA is suing yourself and your neighbors. Your paying for both sides of your lawsuit. So if your case goes to court and you lose, the HOA's legal bills could be awarded by the court for you to pay them. It's the court's decision whom gets to pay or incur the legal expenses. Typically if the case is found to be beyond reasonable/frivolous, the court can make the Plaintiff to cover the HOA's legal expenses. That is because they would be considered "damages".

Now if you were to WIN your case, then the HOA may be on the hook for the damages that a special assessment is needed. Like they may have to make it an insurance claim. The HOA has to pay the insurance deductible plus damages. If their insurance doesn't cover the whole award, then there has to be a special assessment of ALL members. This of course is very very rare circumstances and hypothetical realm.

Most of the time it seems people sue their HOA's because of lack of a rule enforcement issue. So this kind of splits the bill. The HOA may be responsible for their own expenses and the Plaintiff theirs. The HOA if it were to lose has to follow the enforcement the court requires them to do.

All of this of course is all based on hypothetics. Each situation varies. Just keep this in mind... When suing your HOA you are suing yourself and your neighbors, are you okay with that consequence then go for it. If not, negotiate out of court. It never has to go to court if you follow the rules in the first place...

I also want to include that the HOA's attorney is NOT your attorney. So if you were to contact their attorney, the HOA can make you pay that legal bill. Some cases, if you make the HOA have to seek legal advice, they may send you that bill. So just to be clear HOA's attorney represents the HOA as a WHOLE. Their lawyer is the one your lawyer will face in court.

So you can be on the hook for a HOA's legal bill if you don't go to court. Be aware of your HOA's policy before shooting off your mouth "I am going to sue"...

I would think the association would have to countersue if it wants to be rewarded legal costs stemming from the lawsuit, or ask the judge to order the resident to pay. That may happen after the judge renders a verdict and the association attorney makes a motion for this.

You're correct that lawsuits can cause major financial damage, but even hypothetical s are easy to turn one way or another, depending on the facts and how the judge of Judy rules. I think it's better to consider what the association can go reduce the risk of being sued. That will usually reviewing your policies and procedures carefully for consistency, transparency and fairness along with knowing your documents.

There will always be people who will try you, but that's part of running a business. A HOA really is a business, although non-profit, and what you do and how needs to make sense. People don't have to agree, but if you're fair and not easily intimidated, you'll win most of the time, or the issue won't even make it to court.

Short answer: If the HOA's response to the resident's lawsuit explicitly asked, among other things, that the judge order the resident pay the HOA's attorney's fees, and the resident loses the lawsuit, then I believe a judge would order the resident to do so.

Long answer:

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Do your covenants have a statement like the following?

"Available relief in any such action shall include... the recovery of costs and reasonable attorneys' fees incurred by any party successfully enforcing such covenants and restrictions... "

The above quotation is from a certain Indiana HOA's covenant stating:

"Right of Enforcement. Violation or threatened violation of any of the covenants, conditions or restrictions enumerated in this Declaration or in any Plat of all or any part of the Real Estate shall be grounds for an action by Developer, the Association, any Owner,and all persons or entities claiming under them, against the person or entity violating or threatening to violate any such covenants, conditions or restrictions. Available relief in any such action shall include recovery of damages or other sums due for such violation,
injunctive relief against any such violation or threatened violation, declaratory relief and the recovery of costs and reasonable attorneys' fees incurred by any party successfully enforcing such covenants and restrictions; provided, however, that neither Developer nor the Association shall be liable for damages of any kind to any person for failing to enforce or carry out any such covenants, conditions or restrictions."

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This 2001 Indiana Appeals Court decision seems clear that a HOA may recover its attorney's fees from a HOA member when the HOA prevails in court:
https://www.courtlistener.com/opinion/2115355/holliday-v-crooked-creek-villages-homeowners-assoc-inc/?
Note that the above decision excerpts the part of the HOA's covenants that address attorney's fees. It appears that the 2001 Crooked Creek Villages HOA has a covenant exactly like the one I quoted above.

This 2006 Indiana Appeals Court decision says similar:
https://www.in.gov/judiciary/opinions/pdf/11170605ewn.pdf

I understand said attorney's fees are only for the amount the HOA spent on the actual court litigation.

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Two parts of the Indiana HOA Act appear to allow attorney's fees to be recovered under certain conditions as follows:

See IC 32-25.5-5-14 at https://eadsmurraypugh.com/wp-content/uploads/2016/07/Indiana-HOA-Act-2016.pdf. Check with the Indiana government web site to make sure this is the latest version of the statute.

See IC 32-25.5-5-17. "Costs of each party Sec. 17. Except as otherwise provided in this chapter, each party shall bear its own costs for application of this chapter, including
attorney's fees."

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This seems instructive for Indiana: https://dsvlaw.com/prevailing-party-clauses-and-fee-awards-in-indiana/

I have seen covenants that talk about how a HOA that has to spend funds, in general, on a particular HOA unit may assess the costs to this unit. Yet I am also pretty sure I have seen case law that says a HOA may not transfer its HOA attorney's bills to the member. Unless the covenants are very specific on the point, the reasoning above suggests that any consumer dissatisfied with xyz provided by entity 123 could be forced to pay the attorney's bills for entity 123, even though the dispute has not landed in court.

Obviously telling HOA members that they have to pay the HOA attorney's fees for any query the members make of the HOA discourages HOA members from seeking re-dress from their HOAs for legitimate concerns. In my experience, the courts will not buy this.

It's not an expense unless the HOA attorney stupidly chooses to respond, with the attorney thinking she or he can gouge the HOA with needless and ethically inappropriate responses to an unrepresented adverse party. No way does a HOA get to pass along such a billing to a member and get away with it.

Don't pay it.

I know in mine, neighbors that the board knows will vote for them, do get away with talking to the attorney and the HOA gets billed for it. Board doesn't care, they see votes in the next election. Its crazy, the board tells the attorney who to ignore and the attorney goes along with it.

Attorney double bills as well. For instance, they would look over a draft policy and then check it again for the next board or if one member asked them to check the policy again. The attorney calls it a "revision"

And having the president as the designated person to contact the attorney doesn't work either. The president ignores forwarding the neighbors concerns.

Even if one board member has an interpretation of the bylaw issue with the rest of the board the attorney just ignores them because they know its a person in the minority and thus designated as an "adversary"

Even the management has at it at the attorney, HOA gets billed. Attorney doesn't care, just keeps billing. Members come to meetings and hear how many times the management talks to the attorney, no one knows if the manager is even discussing the HOA or perhaps some other HOA.

Too much apathy, neighbors don't care.

To answer the OP's question, NO you cannot recover any legal fee's unless the contract permits it (or if the state law states breach of contract action is recoverable for reasonable fees)

If the HOA brings suit to enforce a restrictive covenant against a violator, then the HOA would be entitled to fee's. Because that's a breach of contract. And vice versa if an owner sues the board for making up bogus rules, then the owner would be entitled to fee's. As that would be breach of contract.

Collecting attorney fee's for late fee's and assessments are usually always recouped by the attorney. Those are pretty straight forward.

If an owner brings suit for say a bad election, each party pays their own fee's regardless of which party wins because its not a breach of a contract case. I've never seen anyone recover fee's for a relief action. But if someone has case law on that, that would be interesting to see.