HOA charging Lawyer fees

I have seen a few recent posts regarding HOA charging back Lawyer fees the HOA paid out. It should be known that NOT all HOA's will do this. It is a choice chosen by your specific HOA. Whether or not it is "legal" depends really on your specific situation and state laws. Best to consult your own lawyer if needed.

Now I am going to approach this from the HOA's point of view. Not that I don't agree with any owner it is "unfair". It just eliminates the many emotional variables an owner would have. A HOA is more business as it is a corporation you are a member of.

Let us say you decide want to sue your HOA or send them a letter from a lawyer. Your HOA has a duty to defend or resolve the issue. It is protecting ALL members from a lawsuit or damages. It is NOT just the "Board" or it's members you are suing. It is EVERY MEMBER. (Including yourself).

The HOA can respond by fixing the issue if at fault. The Board makes a decision based on the rules and creates a compromise/solution. That is the "Easy" fix and the solution we all want. Problem solved.

The HOA on the other hand, may decide to consult a lawyer to respond. This is where things get "sticky". A HOA has every right to consult THEIR lawyer in response your actions. One should expect their HOA to respond with legally correct response. It costs money to interact with their own attorney. (NOT your attorney. You have to have your own). They can charge for phone calls, emails, texts, or in-person meetings. Mine charged $26 to return a phone call.

Who is to pay this cost? The HOA would not had to pay this if they did not have to respond legally. This for them is "damages". The court would call this "damages". The court only makes one "Whole". Meaning any damages incurred must be paid to cover them. Hence this is where we get into the area of sending the bill to the owner for the legal expenses.

Some HOA's may not do this and just consider it a cost of doing business. Already have a set up with the lawyer for advice. It may be part of the budget for legal expenses for consultation. Plus they may wait until the issue goes to a court room for the court to decide who pays the legal expenses. If you lose, the court could make you pay their legal expenses.

Keep in mind a HOA is a corporation. This means A. They MUST be represented in court by a lawyer. B. They do have the option if they do not use a lawyer in court to pick someone from the board. (A bad idea). Most likely either option is NOT doing it for "free". They also can counter-sue you as well. Courts also will throw away any case they find to be frivolous making you pay for it.

If you want to sue a board member specifically or the board, know there is insurance involved. This is one of the benefits of being on the board. It is hard to penetrate the "corporate shield". It would have to be pretty criminal for that to happen. That is also a different court.

My apologies this is long winded. Just wanted to cover most of what it means when you take legal actions or send lawyer drafted letters to your HOA. It is suing yourself and your neighbors. It in no means you do not have a case. This is a CONSEQUENCE for taking these type of actions. It is also not a reason NOT to take these actions. May try a different approach.

If you do get sent a letter from your HOA to pay their legal expenses it may seem "unfair" but you also cost the HOA money/damages for doing so. If the HOA decides handling everything through a lawyer, then you may want to prepare yourself to incur expenses of that decision. Which may be made out of precaution or ignorance on the HOA part.

Biggest bag of BS I have read in a long time!

I brought this same concern up a long time ago. I can only hope that someone new to HOA's does not read what she says as the gospel and use her advice.

I did:

Why are lawyers often considered the scum society? And a lawyer's answer is below

I'm a lawyer and I agree with this statement. We are expensive, we have a "Go Fu$k Yourself" attitude when dealing with people (I had opposing counsel in a small claims action get pissed I wouldn't improve the offer of settlement I put on the table [fifty bucks a month for eighty months], then his client got spend more on attorney's fees then he stood to collect after I banged them with a Motion To Dismiss, objections to discovery, and a two hour hearing that was meant to only be thirty minutes).

We never do enough for our clients in our client's opinion (because it comes down to a judge or jury), we don't like to work for free, we fully expect to be paid at least $250 an hour (I only charge $100 an hour but I don't have an office or staff, will get some later maybe but I like working out of one my corporate client's office and using his space and receptionist for my practice, he only pays $50 an hour for the regular work I do for him and I get free rent and a free receptionist).

When I'm handling civil defense, I won't settle for more than twenty cents on the dollar and that's after I try to cost the plaintiff at least twenty thousand dollars in attorney's fees. I never rush to mediation when I'm in defense or plaintiff, and when I'm in defense I try to schedule mediations at least four months out from the first date opposing counsel gives me. I always look disinterested and annoyed to be at mediation. I don't play be the cliches at mediation, I tell them it's a matter of deal or no deal and that we only negotiate for an hour, after an hour I'll walk out of a mediation with my client and tell the opposing counsel and his client that I like fruit of the month club, and to call me if they come around to my number, no more.

In any two-party legal dispute, I believe a party has to be mindful that in practice, the party has at least two additional adversaries, with severe conflicts of interest when it comes to helping one get justice:

One's own attorney (the more trouble he/she can make, the greater the billable hours, as explained well above)

The court itself (the more quickly it can shut down one side of the other, the lower the cost to the taxpayer)

The agendas of one's own attorney and of the court can result in there being no justice.

Bill Handle is a good example of that..

another reason why I do not value Melissa's postings.


Should I send the HOA the bill for all the 'damages' its caused me?

The American Way is that everyone pays their own legal fees and that is the typically the rule. However there may be clauses in a contract stating that a client may be responsible for legal fees. However in an HOA situation something would have to be present in the governing documents or state law. In CO, the HOA has the right, without legal process to charge legal fees and costs related to collections actions. In enforcement actions however the HOA may SEEK reimbursement for legal fees- very different from the may REQUIRE legal fees in the collections actions (these are two separate statutes). In CO, if a court finds you in violation of the governing documents then by law the judge shall award reasonable attorney fees. However these are court ordered judgements- the HOA can not simply require those charges but they of course can try and see if an owner will just pay them versus dispute them.

Now this is right up my alley because my HOA just charged me for legal fees for an item they say I am in violation for (which is horseshit). They charged legal fees to my account (about $1300) for a cease and desist, phone calls, a zoom meeting, emails to the management company, etc. These fees were applied to my account PRIOR to any covenant enforcement action, thus the due process that is required by law did not exist and it was a guilty until proven innocent scenario. In fact we were told in the attorney's cease and desist letter that we had already incurred legal fees and received this letter PRIOR to even receiving a notice of violation, let alone a hearing which must be offered prior to assessment of any fines. However it appears by the statements in the letter the attorney was under the impression the HOA had already provided violation notices and had already asked for compliance. This did not happen- they went straight to the attorney and that was the first we heard of the issue.

In addition, CCIOA, the laws for HOAs in CO state the association must have a fine policy which they follow. DORA has stated, in writing, that all fines and fine schedules MUST be included in the fine policy or such would likely not be enforceable. Our policy, nor our dispute policy mentions anything about attorney fees being charged.

So, Melissa, ultimately I completely disagree with you. However, all the legal fees I have incurred in responding to the HOA as it relates to this single issue I will claim against the HOA as the situation presents itself.

Hope you trolls take this info to heart!

I believe the losing party should pay all the expenses of the other party. Of course, that is just me.

It is NOT my opinion on paying HOA legal fees. Do NOT mix that up with what I am saying. I am saying that YOUR particular HOA in YOUR state may be able to charge you legal fees if you make your HOA incur them. If the HOA has to draft a legal response in response to your legal or potential legal claim, you may be charged their legal expense. Their lawyer may also advise them this is the route they can take. Again INDIVIDUAL HOA situations.

Example: If the HOA needs to file a lien because you have not paid your dues in 6 months. What charges do you think is all charged in that lien? The charges are the HOA filing costs for filing the lien. (Can be $500). Their costs of sending notifications like certified mail. Other paperwork expenses incurred. The late fees and interest on the money owed. It is then they add the UNPAID dues total that continue to accumulate as you owe. (A lawsuit doesn't accumulate as readily).

So you are subject in paying your HOA's "legal costs" for liens/foreclosure filings. It is the response to your threats of lawsuits or letter of demands that is a gray area for them. My opinion is that if I have a question as a board member, I consult an attorney I say that is on the HOA. However, if need to consult an attorney to draft a legal response to yours, then I say the HOA expense is on the other party. It was an expense the HOA did not need to incur as there was no prior needs to spend money on legal expenses. It to me and to some lawyers would be determined as "damages" that are reimbursable.

Again this is EACH HOA's and state laws who pays the attorney costs. I am just saying don't be surprised if you threaten to file a lawsuit against your HOA or have a lawyer draft a letter of demand, your not going to be charged. Like it or not. You would like your expenses to be paid right? Why would the HOA not as well?

I believe the losing party paying is part of the English Justice System. Makes one think twice before bringing a law suit.

My first reaction when somebody says I am going to sue, is bring it on. We will see you in court. Over the years we have had a few send us threaten to sue. We reply that will not be receiving any further communications from the BOD as we will be turning this issue over to our lawyer. We then sit and wait. So far, so good. This has not only backed them down but some have apologized to us about saying it.

Now there are a few on our BOD that are not dummies. We would know when to take a threat seriously and actually get our lawyer involved. Knock on wood, we have not had to yet.

It should be noted in my response in our HOA it was the same as John's. Threaten to sue I'd just tell you to show me the paperwork. I would not knee jerk react. I wasn't intimidated by a threat to sue. Which is what many people were trying to do with those "empty" threats.

However, I can't speak for other HOA's. Some inexperienced HOA's are always jumpy and running to a lawyer. If you have a MC involved, they may go to the lawyer. You no longer owe the HOA the legal fees but the MC...

My best advice is not to knee jerk react to a threat of a lawsuit. If you live in a HOA that knee-jerk reacts, then you are subject to lawyer fees...

 This is an excerpt from an Iowa Supreme Court case regarding attorney fees. My attorney argued this case in 2003 in the State Supreme Court of Iowa. It was not a HOA case but the law on attorney fees applies. Particularly when it is a contract case which is how Iowa views HOA's CCRs. It is a contract between the homeowner and the HOA. I recollect my attorney speaking of this when I asked him about collecting attorney fees in the lawsuit filed against me by my HOA.

To obtain common law attorney fees, a party must prove “that the culpability of the [opposing party's] conduct exceeds the ‘willful and wanton disregard for the rights of another’ ” standard required to prove punitive damages.  Hockenberg Equip.   Co., 510 N.W.2d at 159.   The opposing party's conduct “must rise to the level of oppression or connivance to harass or injure another.”  Id. at 159-60.  “Oppressive” conduct “denotes conduct that is difficult to bear, harsh, tyrannical, or cruel.”  Id. at 159.  “Connivance” is defined as “voluntary blindness [or] an intentional failure to discover or prevent the wrong.”  Id. (citation omitted).  “These terms envision conduct that is intentional and likely to be aggravated by cruel and tyrannical motives.   Such conduct lies far beyond a showing of mere ‘lack of care’ or ‘disregard for the rights of another.’ ”  Id.

Unless the CC&Rs specifically spell out that attorney's fees will be charged to the homeowner in a dispute, they are rarely awarded (in Iowa) unless the above is proven.

My experience says it is rarely BOD's jumping to threatening a lawsuit but owner's jumping to do so.

Setting aside HOA/COA collections (of back assessments) lawsuits, it's about 50-50 from what I have personally seen.

It might be interesting to do a study of appeals court decisions on the point. I would not even want to guess as to which side is plaintiff more often. A HOA seeks to enforce a covenant. An owner seeks to enforce a covenant. It goes both ways. It might very well be close to 50-50.

Granted at this forum, it's almost always an owner who says he/she wants to sue. Maybe this is because boards do not have a need to come to this forum, since they have an attorney at their disposal. Though from experience, I think directors are well-advised to come here and ask as well. For one things, present and past directors here alike often share what their COA/HOA's respective attorney advised, and this can help a director prepare mightily for a meeting with an attorney.

Correction: Owners threaten (with extraordinary hot air and puffed-up ego, but sometimes, justifiably so) more often. But as far as actually going to court, and setting aside collection lawsuits, from what I have seen about half the time it is owners who are the plaintiffs, and the other half the time it is the HOA/COA who is the plaintiff.

To Add:

I wish I had done things differently because in the end it cost more in attorney fees than the original $5000 the Board requested. That is the practical side of these types of lawsuits. But the emotional side took over. The lawsuit was written particularly ugly. The lawsuit accused us of trespass, that we purposely set out to defraud them, we were malicious... you know lawyer speak. But we took it very personally. After it was all over, we became the neighborhood pariahs. None of the neighbors would speak to us or even offer a friendly wave. As time went on, those bad feelings were replaced with a few friendly waves and cordial chats, but we were never close with any one of them.

Regrettably, my behavior wasn't stellar, but I was always respectful. I didn't resort to name calling or anything like that but I was a vocal critic of the Board's processes and procedures. And rightfully so. And I began requesting meeting minutes as Iowa is not an open board meeting state. I don't think they liked that very much. I once withheld paying an annual assessment as my way of getting revenge but that backfired because they filed a small claims case against me for that. Which ended up costing me filing fees and late fees. So much for getting any revenge. I am not a vengeful person and I honestly regret that and am ashamed of my behavior.

I let it consume me for way too long. I hope my story helps both homeowners and Boards of Directors learn from my experience. Keep your emotions and egos in check, Stick with the issue, try to work things out, use lawsuits and court as a last resort.

Thanks for sharing Banc's. There are many who have found out the "hard way" fighting their HOA has a price to pay more than money. Getting emotional can cost. Witholding dues is not a revenge thing. It's a way to weaken your stance in the HOA by making you no longer in "good standing". It also doesn't make others swallow the "pill" of hearing someone is not paying their dues and involved in a HOA lawsuit. You may be right as rain but no one is going to see the rain if they see their money going down the drain...

Let's get back to the topic please of HOA charging lawyer fees or let it end. Thanks.

In the future, please consider citing any laws you are referencing.

I believe you are correct. See https://casetext.com/statute/texas-codes/property-code/title-2-conveyances/chapter-5-conveyances/subchapter-a-general-provisions/section-5006-attorneys-fees-in-breach-of-restrictive-covenant-action

Importantly though, if a Texas COA or HOA homeowner sues the HOA/COA for breach of covenants, and the HOA/COA wins, the HOA/COA may not recover attorney fees (unless the covenants have an attorney fee provision stating as much).

Section 5.006 has come up a lot but I see no decisions by the Supreme Court where 5.006 is referenced. There are several decisions by Texas Appeals court where 5.006 comes up. I do not see that the law has been challenged as, say, unconstitutional or conflicting with any other law.

Why is it you think HOA owners should not have to pay what the covenants say they should pay? A deal's a deal. As for folks in truly dire situations, there is always bankruptcy ya know. This country is not a socialist democracy. (I make the observation not to be political. Instead I am pointing out that this country does not require HOA/COA owners to provide social welfare (meaning money) to other HOA/COA owners because the other HOA/COA owners could not pay their HOA/COA assessments.)

Fines and late fees are PUNITIVE charges. They are not for profit making. They are there to send a message that if you don't start paying your fair share on time or fix a violation there will be financial consequences. Plus when you lien someone for unpaid dues, it costs money. The HOA has every right to collect money they spend on collecting money owed. This works in the "real world" for other things like mortgages, car payments, credit cards, and utilities. They all charge late fees for not paying the original amount owed. If you can't afford something should not go an buy it. Otherwise, you would not face such charges.

We had an owner whom did not pay their dues for 2 + years. The previous board said they had a lien on the home. The owner was renting the home out. Had a "rent to own" agreement with their tenant. When confronted about paying their owed dues they threatened to burn down the HOA! So the former President ran scared and did nothing. Mind you this was well into 2K of back dues and our dues were only $50 a month. We still had to mow their lawn!

You can imagine how mad the rest of the homeowners/members were to know that someone could not pay dues for 2 years and nothing is being done. Would you be happy to know NOTHING was done? The HOA has the right to collect back dues. That is LEGALLY done by Lien or Foreclosure. (I never would sue bad idea). Since we the Lien in place, I went ahead with the foreclosure process.

Seriously who would lose their house for $2500? That is what we thought. That is not a lot of money. Nope, this person decided to hire not 1 but 4 lawyers! Oh and did NOT pay any of them. (Found out later). Plus they tried to make their tenant pay the back dues! Turns out that "Rent to own" situation was a lie. The owner had a 2nd mortgage on the house and thus was never going to give them the title on the first. I know this because had to go to court when the renter sued the owner for over 10K of all the money they sunk into the home. (The renter won).

Now do you want to attack our HOA for foreclosing on this person? It was NOT for a profit at any point. It was to get someone into the house that would pay their dues. Stop the bleeding.

So before you go jump in that the HOA is doing something for "profit" or "Meanness" maybe you should hear the "real" story. Would you not have asked the HOA to foreclose on this person after hearing they threatened to burn down the place and refused to pay?