Legal Fees

I am trying to get an estimate of a few HOA's budgeted legal fees in Florida, specifically Palm Beach County. And if you have the info, are you usually within the budget?

Thanks!

What Melisssa said, although we have ours on retainer (mostly because we're still wrestling with delinquencies).

It's best that you set your budget based on YOUR community's needs because other communities may have higher or lower costs depending on what's going on. If you're looking for an association attorney, you can start by googling HOA attorneys in your area. Set up a meeting to provide an overview of what you're looking for and they can give you an overview of what they do. If you get serious about a firm or individual attorney, you should ask for references and check them, and review their fee schedule. If you hire the attorney, you can look at the fee schedule and get an idea how much a certain legal action will cost and that could help decide whether to proceed. If you do, you can always ask for legal costs and attorneys fees to be refunded if the association wins the lawsuit.

Lawyers charge for everything, including phone calls, emails, faxes, etc., so you'll want to discuss ways to keep that under control. In our association, our attorney gives us a certain number of hours we can use to ask questions at no additional charge (until we use up the hours, of course) and our previous attorney gave a presentation on trends in HOA state law every year to his clients (it included a steak dinner, which was nice). To keep costs down, we designated the president or treasurer to call or email with questions (I was treasurer at the time) and we sent copies of our emails to our colleagues so everyone knew what was being discussed, In my case, I could access a client portal where I could see what was going on with the delinquency cases and not need to call or email at all, and would add that information to the treasurers report.

Nowadays, I'd also ask if the attorney knows of a certified arbitrator the association could use as an alternative to throwing down in court. Both sides could split the costs, agree in advance to comply with the arbitrator's decision and reimburse the winner. It could save time and avoid higher legal fees for everyone. If the loser decides to sue anyway, the arbitration proceedings could be used as evidence.

A budget is a best guess. The best way for you to gauge what your budget for legal fees should be is to go look at the last 3 - 5 years of actual expenditures. Then see if any of those years were abnormal (you updated your documents or got sued in a one-time lawsuit). Are you doing anything that will involve legal advice this year? Changing your documents? Have a lot of delinquent accounts so you are going to have to file liens? Are you a condo that is going to need legal advice regarding the new condo inspection laws?

Pat,
Your current approach to this will indeed give you a number, but as has been pointed out, it may not be appropriate for your situation. For example, if you are a new HOA, your legal needs will be different than an established community. There are a number of factors that can affect your legal budget. How experienced is your Board? (An inexperienced Board might need to reach out to counsel more often than a group that is experienced.) Is your community large or small? What is the overall disposition of your membership? Are they happy as clams or are they walking around with torches and pitchforks? Do you have a CAM? Having a CAM does have its costs as well, but having one could lower the number of times where you need to seek counsel.

Do an assessment of your situation and then reach out to other communities and ask about who they have and who they might recommend. If you don't yet have one, I would also suggest a CAM. (Check references) If you already have a CAM, ask them. I would also advise that while discussing this with other communities, ask about the actual interactions they have. For example, when asked a seemingly simple question, does counsel respond with a lengthy report when a shorter answer would seem to be more appropriate? I've had experiences with counsel who have been asked simple questions and consistently returned full page responses citing previous court findings and interpretations which would be useful to an attorney, but not to an HOA President. Do your homework and get some help. Once you have some candidates lined up, have the Board or a committee interview them.

I hope this helps. Best of luck in your search.