Our HOA lawyer wants $150 for emailed advice that was incorrect.

Our PM asked our HOA lawyer a question on our behalf and we got a $150 bill from the law firm. The question was if the HOA could contact the Mortgage lender and ask them to enforce the PUD rider for HOA members that were severely behind on their dues by providing a copy of the lien all of which is public info.

Lawfirm said

"I do not recommend that the HOA reaches out to the lender. It’s unlikely that the lender would even respond, but contacting the lender is a violation of the Federal Debt Collection Practices Act and the North Carolina DCPA. A debt collector, including an HOA, cannot disclose debts to a third party such as a lender unless the debtor agrees to it."

Only problem is the FDCPA does not apply. this lawfirm blog post, and others confirm that.
https://www.wardandsmith.com/articles/what-community-associations-in-north-carolina-need-to-know-about-fair-debt-collection#:~:text=The%20Fair%20Debt%20Collection%20Practices%20Act&text=Fortunately%20for%20Associations%2C%20the%20FDCPA,Dues%20using%20an%20assumed%20name.

Should I ask the lawfirm to dismiss the bill for bad advice?

I"m sure they will counter that the NCDCPA does apply therefore their advice is still valid. My response would be that NCDCPA doesnt' apply to lawyers collecting a debt so why didn't you advise us that your lawfirm could send the letter.

I'm biased. I think most lawyers are sharks so putting this out there to get others perspective.

I'm not convinced that the advice was wrong.

An association may not be considered a collector, but if the association handles collections through the lawyer, then the lawyer may be considered a collector. This was the case in my association, and any collection letters sent to our delinquent owners had a notice displayed prominently at the top of the letter stating that the legal firm is acting as a collector and subject to FDCPA.

Even if the advice was wrong, you may want to consider the possible consequences of stiffing the attorney and having him act as a collector against the association. If you're adamant that you're correct, talk to another lawyer and see if that person agrees with you.

Usual Disclaimer: IANAL

not the case here. I would not stiff the attourney, I would simply state his advice was wrong and ask for the bill to be dismissed. the lawyers response will probabaly tell me all I need to know.

if lawyer says no need to pay he is ignorant, but at least ethical.

if lawyer says hoa needs to pay the bill. he is ignorant and not ethical, which in my opinion would be call to drop them and look for someone else.

Let us know how it works out.

Our property manager has stated that she cannot contact homeowners about delinquent bills outside of the published (and attorney approved) collections policy, otherwise, that would put her firm in the position of being a debt collector and subject to rules and regulations.

Thus, the advice of your attorney is exactly what I have been told by ours. Not recommended and something that we do not do.

I think that was good advice from my perspective.

My first year on the board we received a bill from the attorney, who is also our registered agent, because a potential buyer contacted them with a question.

Since they were technically the official contact for the HOA (the purpose of a registered agent), we had to pay the bill.

However, this prompted us to update our disclosure package information and do more publishing of the boards contact information.
So, some good came of it.

Wendy,

For your specific issue, I agree with others, you need to pay the bill.
The PM asked for an opinion on the Associations behalf.
You received an opinion.
Similar to the opinions offered here, you are free to believe some, all or none of the opinion offered.
The difference being, our opinions are free and the attorney charges for theirs.

To clarify policy re: contact with the a attorney, the Board needs to devise and vote on it. The prez alone should not overreach and instruct the attorney.

Above, Wendy, you wrote

Wendy wrote in the OP: "Our PM asked our HOA lawyer a question on our behalf..."

To clarify policy re: contact with the attorney, the Board needs to devise and vote on it. Ditto on whether the PM can contact the attorney without board authorization. The prez alone should not overreach and instruct the attorney. You've expressed a lot of concern about autocratic "HOAs," but it sounds like you feel the president can make policy decisions alone without board consultation!

What does your contract with your HOA say about who may contact him, etc. ? Ours says only the board president is the point of contact. But, Board policy here is the contact is at the Board's direction.

BTW, the $150 bill should get filed on the dark of the moon.

You are so clueless!

Max READ the OP's posting. They wanted the PM to go and collect the debts. The PM is telling them that would make them the "Debt collector" which is NOT a position they should be in. So follow the LOGIC here. The PM does NOT collect the debt of anyone who owes money to the HOA. The HOA may pay the PM to hire a lawyer to file a lien on the HOA's behalf.

The OP is asking the PM to talk to the PM's lawyer for advice on contacting the Mortgage company about owners who owe money/lien in order to collect. NO. This IS NOT how it works without paying the lawyer bill... They OWE the money!!!!

AND you would send the HOA the bill for the attorney advice to them would you not???

Do you know what a PUD Rider of Condo Rider is? You signed one of them when you moved into your HOA.

Max appears to be of the opinion you should not pay the bill.

Yes this is exactly what the HOA was trying to do, but the PM put the breaks on it and told the HOA board to not send the letter to the servicer (also the lender in this case) till she hears back from the lawyer. I thought she was going to talk to the PM's lawyer.
If I had known she was contacting our lawyer who will loose $$$$ if we dont' give him the opportunity to foreclose then I would of told the PM that I'll find my own lawyer without a conflict of interest.

Anyways I learned something.

There is no contract just an engagement letter that lists hourly rates and is pretty vague.
I've been working on getting HOA policies together.
We've had an HOA for 25+ years and there are ZERO policies on anything that old boards handed down. Trust me the rest of the board will have equal input. I begin every meeting saying that my title doesn't give me any extra authority and we should feel free to disagree. happy new year.

Lots of takeaways from this, - starting with paying the $150 - I'm sure it won't break your association. You asked the property manager to pose a question to the attorney and got an answer. That doesn't guarantee you'll like what you hear or get the results you want based on the attorney's advice - and sometimes attorheys ARE wrong.

Like Cathy, I'm not sure this attorney was incorrect - ours told us the same thing. His family also ran a collection agency, so he was well versed in what the HOA could and couldn't do. I don't know how the property manager posed your question- it's possible that's why you got the response. This is why legal questions aren't as simple as people may think - if the attorney had certain background information on this account that may have changed what you were told.

We usually started with a lawsuit to get a judgement and then place a lien. Generally the bank would find out about the lien and they'd either take action or sit there until we pursued foreclosure. You never knew what the bank would do because mortgages get sold and resold to where you aren't sure who has the damned thing.

I realize you may not be trusting of attorneys, but that's why you have do your due diligence in picking one who's right for your association. You may end up with one who will do the bulk of association work and another you'll call if legal action is required for delinquencies. That'd almost a specialty in itself and I prefer the ones who do things like:

provide a fee schedule so we'll know exactly how much it'll cost to answer legal questions with a phone call, fax or email (because they charge for everything). Thats why we designated the president or treasurer with making the contact and the board had to vote to approve the contact.

Provide education on the collection process so well have a general idea of how to proceed, how long it might take and odds of success.

Assist in evaluating our collection policy so we can tweak it to make it more effective. A key to that is to get the account to the attorney as soon as possible- the longer you delay, the harder and more expensive it gets.

That's my opinion - and you know what people say about those. Take some, none or all of this and I hope it works out for you.

No I didnt' ask my PM to get an attorney's opinion. I told the PM I was going to mail this letter and tell the Loan Servicer to mail the check to the PM. Then PM goes over my head and gets lawyer to say not to do that. The same lawyer that's making Thousands of dollars if we foreclose on it. Major conflict of interest.

I'm not annoyed PM got a lawyers opinion. I'm annoyed she got an opinion from OUR lawyer who has a conflict of interest in the matter. And I'm annoyed they gave me wrong advice. I'm also annoyed the lawyer did not ask the board if we wanted this advice. He is OUR lawyer, not the PM's lawyer.

There are a bunch of exceptions and that's why it's sooo confusing

That joke went right over your head bless your heart

At this point, I think the lawyer is technically correct in asserting that the lender is a third party. Here's what I think is going on: The attorney is between a rock and a hard spot. Attorneys by law are not supposed to give advice that encourages clients to break the law. Where a mortgage has a PUD rider (stating the lender //may// pay past due assessments owed to the HOA or condo association), the attorney may, in actuality, know that a HOA contacting a lender might, practically speaking, get the desired result. But the attorney cannot be a part of this. Under his obligations to the state bar, he has to advise against this, since technically, contacting the lender is contacting a third party without the HOA member's permission, in violation of debt collection statutes.

What about the apparently many HOAs who go ahead and contact lenders (where a PUD rider exists)? Like the HOA manager here describes: https://communitynewspapers.com/kendallgazette/what-are-pud-condo-riders-and-how-are-they-best-used/ . Notice that the author of the latter site is not an attorney. Where a PUD rider exists, this HOA manager claims that HOAs have the right to contact lenders where a PUD rider exists. Suppose a HOA does this regularly. Could a HOA member complain and maybe even sue the HOA (and manager) to enforce fair debt collection statutes prohibiting third party communications? I do not think this is likely. Because the fact is that the lender could, say, become aware of the debt via the lien filed with a county clerk. The fact is that the PUD rider gives the lender the right to pay debts the HOA member owes to the HOA. The fact is that the alternative is for the HOA to go through the expensive foreclosure process, costing the HOA member and possibly the lender even more. A HOA member filing suit for violation of the fair debt collection statutes is protracting the inevitable, and at great cost.

Still, technically I think the attorney is correct.

The board has no legal obligation to take an attorney's advice. If your HOA board digests the above and wants the HOA to reach out to lenders, and do so without using an attorney, then your board could vote to go against the advice of counsel. The attorney's advice is only an opinion, after all. Whether the manager would now be comfortable sending a letter from the HOA to a lender is another matter.

Unfortunately this discussion is now likely way over the heads of the typical board member. Understandably the typical board member will probably and wisely believe that following the advice of counsel is best.

Best practices? Hire a manager willing to send letters to lenders? Ask the attorney to send a letter to the HOA member, asking the HOA member's permission to contact the lender, with the letter pointing out that the PUD rider says the lender can pay the debt (and spare all a lot of pain)? It's possible many HOA members did not even know they could get back to good standing with the HOA by asking their lender to pay off debts to the HOA.

the law states
(b) Communication with third parties
Except as provided in section 1692b of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

HOA's collecting their own debts are not considered debt collectors, so the law does not apply. end of story.

As for your original question, the lawyer was paid for an opinion. His opinion may or may not be correct but he fulfilled his obligation when he gave his opinion. Pay the bill and move on. End of story.

wrong, I never wanted anyone to send a letter. therefore FDCPA does not apply.
I origianlly told the PM we will eat this fee one time and lets see what other board members say.
Now I"m gonna email pm and say my vote is to not approve the fee at all. the PM should not be hiring lawyers with a conflict of interest to give their opion without board approval.

to all the other posts that also include incorrect assumptions i dont' have time to address all the incorrect assumptions

Yeah, law degree by Google - gives me the warm and fuzzies