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HOA Attorney Fees

Started by PegM1 • 10 replies • 598 views

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PegM1 (Pennsylvania)
Posts: 26
Posted:
This is a question regarding legal costs for a specific case between a homeowner and the HOA. The HOA attorney's contract specifically says he represents the entire HOA. His bills are paid by the HOA; would the homeowners in the HOA be considered clients? Can homeowners "legally" ask what dollar amount was spent on legal fees for a specific case? The homeowners want to know what the ultimate cost was pertaining to this specific case -- understanding that there is attorney/client confidentiality, the homeowners are not looking for the legal process or personal legal exchanges details, just the cost. Since the homeowners are paying the legal bills; are they entitled to know the final cost for the legal fees. Is this doable?

Thank you, in advance, for any help and info.
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By PegM1 on 07/21/2020 5:07 PM
This is a question regarding legal costs for a specific case between a homeowner and the HOA. The HOA attorney's contract specifically says he represents the entire HOA. His bills are paid by the HOA; would the homeowners in the HOA be considered clients?
No. The corporation is the attorney's client.

Quote:
Posted By PegM1 on 07/21/2020 5:07 PM
Can homeowners "legally" ask what dollar amount was spent on legal fees for a specific case? The homeowners want to know what the ultimate cost was pertaining to this specific case -- understanding that there is attorney/client confidentiality, the homeowners are not looking for the legal process or personal legal exchanges details, just the cost. Since the homeowners are paying the legal bills; are they entitled to know the final cost for the legal fees. Is this doable?
Under Corporate statute; sometimes HOA or condo statute; and sometimes a HOA's governing documents, Homeowners are legally entitled to review records of the association. This includes invoices from the attorney. This is the law. But in practice, many boards and managers obstruct homeowners records requests. Sometimes a homeowner has to hire an attorney to threaten suit and sometimes, take the HOA/condo to court. If you want specific directions on how to make a request for the invoices, post back asking as much.

Of course, if you simply review the monthly or yearly financial statements, these may very well give you a good idea of what was spent. Does your HOA share these financial statements?

PegM1 (Pennsylvania)
Posts: 26
Posted:
I follow our financial statements. However, the legal fees are grouped together as a budget item "Legal/Collection Fees" so there is no way to break out the legal fees we were charged for a specific case. The idea is to find out what the legal charges were for particular, individual case (that has gone on for over 4 years).

Thank you for responding.
PegM1 (Pennsylvania)
Posts: 26
Posted:
Also, we are not an incorporated HOA. I'm not sure if that matters. You mentioned the attorney "represents the corporation."
AugustinD
Posts: 5,144
Posted:
To make a request to review the 'record of account' for the attorney's fees, see https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=15&div=0&chpt=55&sctn=8&subsctn=0

Explain exactly what you want (the fees paid for the lawsuit). Send your request "registered mail, return receipt requested" to the manager.
PegM1 (Pennsylvania)
Posts: 26
Posted:
AugustinD: Thank you for the help and advice!
AugustinD
Posts: 5,144
Posted:
Quote:
Posted By PegM1 on 07/21/2020 5:21 PM
Also, we are not an incorporated HOA. I'm not sure if that matters. You mentioned the attorney "represents the corporation."
If your HOA is truly not a corporation, then this may change everything. For a HOA not to be a corporation is not typical.

Elsewhere you posted that this is a HOA of single family homes, with a 55+ age restriction.

Is your HOA subject to the Pennsylvania Uniform Planned Community Act? If so, under this statute you have the legal right to review "all financial and other records" of the HOA. Cite the following in your records request:
https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=68&div=0&chpt=53&sctn=16&subsctn=0
AugustinD
Posts: 5,144
Posted:
Also, even though your HOA is not (or may not be) a corporation, it is almost certainly organized such that the HOA attorney represents the HOA as a whole. The HOA attorney is not at the beck and call of individual members.

From earlier threads, I see also that this is a 200+ home HOA.
PegM1 (Pennsylvania)
Posts: 26
Posted:
Our Declaration indicates we are an "unincorporated HOA." We file an 1120-H tax form. Would asking for just the account record payments for a specific case be considered a violation of attorney/client privilege?

I do appreciate the help. Thank you.
AugustinD
Posts: 5,144
Posted:
-- Thank you for the elaboration.

-- I do not think the 1120-H has any bearing here.

-- The law is clear that attorney client privilege does not apply to the HOA attorney's invoices. There is quite a bit of case law on the subject, as it happens, on account of this question usually arising with corporations (having shareholder/members) and corporate case law being vast. (That your HOA is not a corporation is not going to invalidate certain tenets from corporate case law being applicable. This is really mostly about what attorney-client privilege covers. What records you are entitled to is pretty clear.) However, boards consist of amateurs, and HOA attorneys are often happy to abet the board in obstructing owners exercising their legal rights. I have seen a HOA attorney insist the records were covered by attorney-client privilege. This was a lie. A group of us were prepared to go to court over this. We consulted an attorney who said 'absolutely, as members of the HOA you are entitled to review the HOA attorney's invoices. Attorney client privilege does not apply.' Then I got on the board and reviewed the invoices we wanted.

It's likely going to be a battle, but yes, you do have the legal right to view these invoices.

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