ConchoP (Texas)
Posts: 208
Posts: 208
Posted:
We have several leins that we can either turn over to collections or our attorney. Which is better?
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Collections vs Attorney
Started by ConchoP • 37 replies • 507 views
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LetA (Nevada)
Posts: 2,679
Posts: 2,679
Posted:
Find a collection agency that is an attorney; or find an attorney that specializes in debt collections.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Our attorney, one of the largest in SC that specializes in HOAs, also has a collection division as part of their practice. Look for one like this.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
A lien is a method of collecting money owed. It accumulates over time, covers filing costs, and can not sell the home until paid. If you wanted to do another collection methods maybe before filing the liens? Plus next step could be foreclosure. Which is NOT a money making adventure. It's to stop the bleeding only. All it does is get rid of non-payers in hopes the new owner will be payers. You never want to do a foreclosure if the owner's bank is already foreclosing. The bank gets paid first and foremost.
My suggestion is two fold. 1st make a KNOWN policy of what triggers a lien and then foreclosure. We have a policy of 6 months we lien. 1 year we CONSIDER foreclosure. People knowing the policy of collection outside of late fees may get action. 2nd I would make sure to be sending certified letters once a month to their HOA and if they live outside the HOA. Letting them know that they have a lien and what steps to take to pay it off.
People will claim "ignorance" they did not know they needed to pay. Having the receipt of a certified letter will prove otherwise. Do NOT open up any returned certified letters. This is proof they were served but did not open it.
Be careful of hiring a lawyer. They may not be telling you all the collection options. Some collection companies do not do liens. They may be limited in scope of collections they do. Either way, your HOA will be paying money out to collect rather than waiting for the lien to be paid off.
My suggestion is two fold. 1st make a KNOWN policy of what triggers a lien and then foreclosure. We have a policy of 6 months we lien. 1 year we CONSIDER foreclosure. People knowing the policy of collection outside of late fees may get action. 2nd I would make sure to be sending certified letters once a month to their HOA and if they live outside the HOA. Letting them know that they have a lien and what steps to take to pay it off.
People will claim "ignorance" they did not know they needed to pay. Having the receipt of a certified letter will prove otherwise. Do NOT open up any returned certified letters. This is proof they were served but did not open it.
Be careful of hiring a lawyer. They may not be telling you all the collection options. Some collection companies do not do liens. They may be limited in scope of collections they do. Either way, your HOA will be paying money out to collect rather than waiting for the lien to be paid off.
Former HOA President
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Our community's attorney is the collection agent - it's part of the service we pay for.
SheliaH (Indiana)
Posts: 6,964
Posts: 6,964
Posted:
How old are the liens and how much money is at stake? You may also need to check if you'll need to renew the lien (which you should have asked about when the lien was placed). You may not need to do anything with the ones that were filed in the past year, but consider what's happened since all the liens were filed - has the owner made any effort to bring the account current? Is the amount owed rising?
Do you know if the owner has a mortgage and if so, has the mortgage company started a foreclosure? As Melissa noted, no need to do their job - if your lien is current, you'll have to wait until they finish their process and pray there will be enough money to pay them and the HOA lien.
Those are just some of the issues you need to consider before you proceed, so if you haven't discussed your options with your facility attorney, make that job one.
While you're at it, develop a collection policy because it doesn't sound like you have one (or it's really basic). You and the homeowners need to know what will happen, when it will happen and what's at stake (liens placed against the home, lawsuits, etc.) Every year, the policy should be evaluated to see what's working or not. This would also include the attorney's performance - some are better than others when it comes to delinquency collections, and while there are some things not in their control (e.g. when the person files bankruptcy), you want to see steady progress and regular communication in what the board might do and why, including writing off the account if everything has been tried without success.
Do you know if the owner has a mortgage and if so, has the mortgage company started a foreclosure? As Melissa noted, no need to do their job - if your lien is current, you'll have to wait until they finish their process and pray there will be enough money to pay them and the HOA lien.
Those are just some of the issues you need to consider before you proceed, so if you haven't discussed your options with your facility attorney, make that job one.
While you're at it, develop a collection policy because it doesn't sound like you have one (or it's really basic). You and the homeowners need to know what will happen, when it will happen and what's at stake (liens placed against the home, lawsuits, etc.) Every year, the policy should be evaluated to see what's working or not. This would also include the attorney's performance - some are better than others when it comes to delinquency collections, and while there are some things not in their control (e.g. when the person files bankruptcy), you want to see steady progress and regular communication in what the board might do and why, including writing off the account if everything has been tried without success.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney, assuming an overall plan/strategy is in place. Said plan/strategy is designed to get the word out to owners that falling behind will lead to foreclosure et cetera, and with those who owe the most targeted first.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney, assuming an overall plan/strategy is in place. Said plan/strategy is designed to get the word out to owners that falling behind will lead to foreclosure et cetera, and with those who owe the most targeted first.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Quote:
Posted By ElleN on 11/29/2023 7:42 AM
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney, assuming an overall plan/strategy is in place. Said plan/strategy is designed to get the word out to owners that falling behind will lead to foreclosure et cetera, and with those who owe the most targeted first.
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney, assuming an overall plan/strategy is in place. Said plan/strategy is designed to get the word out to owners that falling behind will lead to foreclosure et cetera, and with those who owe the most targeted first.
In our case,
any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By JohnC46 on 11/29/2023 3:15 PM
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
LetA (Nevada)
Posts: 2,679
Posts: 2,679
Posted:
Quote:
Posted By ElleN on 11/29/2023 7:42 AM
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney, assuming an overall plan/strategy is in place. Said plan/strategy is designed to get the word out to owners that falling behind will lead to foreclosure et cetera, and with those who owe the most targeted first.
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney, assuming an overall plan/strategy is in place. Said plan/strategy is designed to get the word out to owners that falling behind will lead to foreclosure et cetera, and with those who owe the most targeted first.
That may be true for medical debt collections: our collection agency bills the collection fee separately from the monies owed to the HOA.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Quote:
Posted By ElleN on 11/29/2023 7:42 AM
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney ... snip...
I am pleased to see so many say that an attorney specialized in collections (who might also be a HOA attorney) is the way to go. I agree.
From experience, collection agencies take a huge share of what they collect and did not do as good a job as a collections attorney ... snip...
This right here.
The HOA attorney has a fiduciary duty to their client.
The collection agency is a for-profit business that is acting in its own interests. They may employ an attorney, but the attorney works for the agency, not the HOA.
Yes, you'll pay the HOA attorney for their time and effort - and the collection agency will take a chunk of what they collect. Depending on the dollars involved, this may be a wash. But the fiduciary duty tips the scales in favor of the HOA's own attorney.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Again I am a bit confused... IF there is a lien on file, is that NOT a collections action? Seems like it's a patience thing in collecting. If you have a lien on file then the amount owed accumulates. Plus the filing costs are covered. It just is a slow process. Have to wait to be paid or they need to sell. After a certain amount of time one can decide to foreclose on that lien. Which is NOT always a good idea. It's just a stop the bleeding. There are many considerations before going down that rabbit hole. Which is not all it's cracked up to be. There is a right of redemption period in many states after a foreclosure. Which means no one may be able to touch that property up to a year after foreclosure.
So I am not sure why need to take the collections/attorney route at this point. It's already been done. Choosing to sue is a bad idea for multiple reasons. All an attorney can do send notices and file lien/foreclosures. Not sure what your looking for in terms of collections if Lien/Foreclosure is the legal route already taken. Your HOA just needs to be more active in sending notices for collections. No lawyer needed for that unless it makes the HOA more serious sounding.
So I am not sure why need to take the collections/attorney route at this point. It's already been done. Choosing to sue is a bad idea for multiple reasons. All an attorney can do send notices and file lien/foreclosures. Not sure what your looking for in terms of collections if Lien/Foreclosure is the legal route already taken. Your HOA just needs to be more active in sending notices for collections. No lawyer needed for that unless it makes the HOA more serious sounding.
Former HOA President
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
I have never heard that an HOA attorney has a fiduciary duty to his client.
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Our association's attorney has acted neither in the interest of the association, or the board, but only in his own.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Quote:
Posted By TerriS6 on 11/30/2023 4:23 AM
I have never heard that an HOA attorney has a fiduciary duty to his client.
I have never heard that an HOA attorney has a fiduciary duty to his client.
All attorneys have fiduciary duties to their clients, and this duty persists even after the client ceases to be a client. If that client gets into a legal dispute with another person ten years later, the lawyer can't represent the other person.
HOA attorneys aren't a sub-class with lower standard. There are various specialties in the law, and being competent in one doesn't make you competent in another. A criminal defense attorney is not going to represent someone in a civil dispute, and vice versa. Trial lawyers aren't the same as lawyers who deal with contracts or who draft motions all day long. There are even lawyers who specialize in tracking down hidden assets, because people with a judgement against them like to squirrel away assets where - they hope - nobody else can find them.
I'm sure you can find lawyers who don't live up to this ethical standard, but it is the standard.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Should have added that this is why HOA attorneys can't represent homeowners. The conflict of interest arises out of the attorney's fiduciary duty to the HOA.
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Thanks, I hadn't seen their various obligations expressed as a fiduciary duty
LoriM15 (Florida)
Posts: 1,009
Posts: 1,009
Posted:
I think we are in the minority here. We use a collections agent and not our attorney for collections. It has worked well for us. Once we have done all we can do in-house and the debt is over $1000, the collections agent takes it over and proceeds. The only issue I have is that they have to work with an attorney to get the lien filed and they are pretty slow at that. But they do a good job of getting the owner to sign a payment plan if possible.
However, once the home goes into foreclosure, we get our own attorney involved to make sure that our claim in represented.
However, once the home goes into foreclosure, we get our own attorney involved to make sure that our claim in represented.
CathyA3 (Ohio)
Posts: 6,299
Posts: 6,299
Posted:
Quote:
Posted By TerriS6 on 11/30/2023 6:29 AM
Thanks, I hadn't seen their various obligations expressed as a fiduciary duty
Thanks, I hadn't seen their various obligations expressed as a fiduciary duty
The article below is written by a former practicing lawyer and now a professional writer.
Understanding a lawyer’s breach of fiduciary duty in California.
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Quote:
Posted By CathyA3 on 11/30/2023 7:15 AM
Posted By TerriS6 on 11/30/2023 6:29 AM
Thanks, I hadn't seen their various obligations expressed as a fiduciary duty
Thanks, I hadn't seen their various obligations expressed as a fiduciary duty
The article below is written by a former practicing lawyer and now a professional writer.
Understanding a lawyer’s breach of fiduciary duty in California.
I found this article after first reading your post. Thanks for taking the time to send it.
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Quote:
Posted By AidylP1 on 11/29/2023 3:45 PM
Posted By ElleN on 11/29/2023 3:17 PM
... and nationwide, it is common for a HOA's governing documents to authorize this. Thank you for reminding the forum of this. Posted By JohnC46 on 11/29/2023 3:15 PM
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
Have an attorney handle the collections, if they have the money to pay their fees. One association uses the law firm mentioned here all the time and they are useless but expensive.
Typically once the collector/attorney is involved the owner now pays them direct. They take out their piece and forward the balance to the association.
DavidG45 (Delaware)
Posts: 994
Posts: 994
Posted:
Quote:
Posted By JohnC46 on 11/30/2023 10:21 AM
Have an attorney handle the collections, if they have the money to pay their fees. One association uses the law firm mentioned here all the time and they are useless but expensive.
Posted By AidylP1 on 11/29/2023 3:45 PM
Posted By ElleN on 11/29/2023 3:17 PM
... and nationwide, it is common for a HOA's governing documents to authorize this. Thank you for reminding the forum of this. Posted By JohnC46 on 11/29/2023 3:15 PM
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
Have an attorney handle the collections, if they have the money to pay their fees. One association uses the law firm mentioned here all the time and they are useless but expensive.
Typically once the collector/attorney is involved the owner now pays them direct. They take out their piece and forward the balance to the association.
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By DavidG45 on 11/30/2023 10:47 AM
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
Over a few years the HOA switched to a collections attorney. Foreclosure proceedings began in a few cases. There were some settlements. But delinquencies took a marked dive. I presume because word got out that the HOA with its collections attorney was now, like an attack dog, grabbing owners with its legal teeth and shaking them around until they coughed up what they owed.
Perhaps your HOA should shop around and switch attorneys.
Or go ahead and try a collections agency and watch them milk your HOA.
DavidG45 (Delaware)
Posts: 994
Posts: 994
Posted:
Quote:
Posted By ElleN on 11/30/2023 11:12 AM
I can only speak for myself. My suggestion was not the least bit casual. For years my former 2000+ HOA had been using a collection agency. Delinquencies were in excess of $400,000 by 2010 (and in 2010 dollars). Every time a collection was made, the agency took a huge chunk, like half. Successful collection just did not happen very often. Owners knew they could blow off the notices. Posted By DavidG45 on 11/30/2023 10:47 AM
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
Over a few years the HOA switched to a collections attorney. Foreclosure proceedings began in a few cases. There were some settlements. But delinquencies took a marked dive. I presume because word got out that the HOA with its collections attorney was now, like an attack dog, grabbing owners with its legal teeth and shaking them around until they coughed up what they owed.
Perhaps your HOA should shop around and switch attorneys.
Or go ahead and try a collections agency and watch them milk your HOA.
I do intend to shop around - both for attorneys and collections agencies - and see which one offers a better solution.
Currently it works like this. Homeowner gets a couple months behind on payments and they get a stern warning letter. If they get behind $500 it goes to the attorney and we notify the owner that all future correspondence must be with the attorney. At that point we start getting a tidal wave of invoices from the attorney, which we pay and then add to the homeowner's account. I just recently reviewed our ten largest accounts, and found that the average had about $2,000 in late assessments, and about $4,000 in attorney expenses(!) On balance our A/R right now is about 45% attorney fees - fees that we have paid but we have not yet received from the homeowner.
Here is the problem. So long as that homeowner remains delinquent, the attorney bills us almost every month. As soon as the homeowner pays, the attorney no longer has billable hours. So the attorney has no financial incentive for the homeowner to pay up. In fact, whenever a homeowner catches up it is bad for the attorney.
Meanwhile, though we have not yet interview any collection agencies, my understanding is that they get nothing until the homeowner makes a payment. Then they keep some of it (first one I've looked at keeps 25%) and send the rest to us. Meaning we are out zero dollars; compared to currently we are out tens of thousands of dollars each year.
I'm not going to say one is always better than the other; but before making a decision about how to pursue delinquent assessments an HOA needs to review all of the choices. "Hire an attorney" or "Hire a collection agency": neither one is a definitive answer.
TimB4 (Tennessee)
Posts: 21,059
Posts: 21,059
Posted:
Quote:
Posted By DavidG45 on 11/30/2023 11:23 AM
Currently it works like this. Homeowner gets a couple months behind on payments and they get a stern warning letter. If they get behind $500 it goes to the attorney and we notify the owner that all future correspondence must be with the attorney. At that point we start getting a tidal wave of invoices from the attorney, which we pay and then add to the homeowner's account. I just recently reviewed our ten largest accounts, and found that the average had about $2,000 in late assessments, and about $4,000 in attorney expenses(!) On balance our A/R right now is about 45% attorney fees - fees that we have paid but we have not yet received from the homeowner.
Currently it works like this. Homeowner gets a couple months behind on payments and they get a stern warning letter. If they get behind $500 it goes to the attorney and we notify the owner that all future correspondence must be with the attorney. At that point we start getting a tidal wave of invoices from the attorney, which we pay and then add to the homeowner's account. I just recently reviewed our ten largest accounts, and found that the average had about $2,000 in late assessments, and about $4,000 in attorney expenses(!) On balance our A/R right now is about 45% attorney fees - fees that we have paid but we have not yet received from the homeowner.
We turned ours over to the attorney for collections. However, we specify to also start the foreclosure process.
You will be surprised at how fast someone wants to pay once they get a notice that includes foreclosure.
That said, at best we broke even.
Sometimes we lost a little.
However, once it's known that the Association is willing to foreclose, others pay attention and delinquency rates drop.
In my previous association, the assessment was annual but members could make monthly payments.
At the 120 day delinquent mark, the full year assessment is due (no monthly payments allowed) and the issue is turned over to the attorney.
Attorney would send the notices required by statute and file papers for legal action.
ElleN (Idaho)
Posts: 4,420
Posts: 4,420
Posted:
Quote:
Posted By DavidG45 on 11/30/2023 11:23 AM
Here is the problem. So long as that homeowner remains delinquent, the attorney bills us almost every month. As soon as the homeowner pays, the attorney no longer has billable hours. So the attorney has no financial incentive for the homeowner to pay up. In fact, whenever a homeowner catches up it is bad for the attorney.
Here is the problem. So long as that homeowner remains delinquent, the attorney bills us almost every month. As soon as the homeowner pays, the attorney no longer has billable hours. So the attorney has no financial incentive for the homeowner to pay up. In fact, whenever a homeowner catches up it is bad for the attorney.
One has to hope the attorneys' rules of professional conduct are not for nothing.
As for "definitive answers": People are sharing their specific experience. I am not going to reject someone's specific experience. From this crowd-sourced forum readers can get an idea of where to begin.
DavidG45 (Delaware)
Posts: 994
Posts: 994
Posted:
Quote:
Posted By ElleN on 11/30/2023 1:11 PM
This is an inherent conflict of interest not just for collections attorneys but for all attorneys. In other words for any attorney: It pays to protract litigation and disputes. Posted By DavidG45 on 11/30/2023 11:23 AM
Here is the problem. So long as that homeowner remains delinquent, the attorney bills us almost every month. As soon as the homeowner pays, the attorney no longer has billable hours. So the attorney has no financial incentive for the homeowner to pay up. In fact, whenever a homeowner catches up it is bad for the attorney.
Here is the problem. So long as that homeowner remains delinquent, the attorney bills us almost every month. As soon as the homeowner pays, the attorney no longer has billable hours. So the attorney has no financial incentive for the homeowner to pay up. In fact, whenever a homeowner catches up it is bad for the attorney.
One has to hope the attorneys' rules of professional conduct are not for nothing.
As for "definitive answers": People are sharing their specific experience. I am not going to reject someone's specific experience. From this crowd-sourced forum readers can get an idea of where to begin.
I don't want to dive too deep into what constitutes professional conduct. I will say the current arrangement seems, well, inequitable. The only comparison I can make is some 20+ years I spent with local tax offices in Texas, where delinquent taxes were turned-over to delinquent attorneys. The state-mandated arrangement was that the attorneys added a 15% fee, then went after those taxpayers who were delinquent. All money (less the 15%) was then sent back to the county, school, town, etc. So the attorney only got paid when they collected money, and the local tax office did not have to outlay a single dollar.
That seemed like a fair arrangement for everyone.
Our current HOA arrangement means we send thousands of dollars to our attorney, our homeowners go deep into debt, and the attorney buys a beach home.
WendyM5 (North Carolina)
Posts: 1,522
Posts: 1,522
Posted:
Quote:
Posted By DavidG45 on 11/30/2023 10:47 AM
Typically once the collector/attorney is involved the owner now pays them direct. They take out their piece and forward the balance to the association.
Posted By JohnC46 on 11/30/2023 10:21 AM
Have an attorney handle the collections, if they have the money to pay their fees. One association uses the law firm mentioned here all the time and they are useless but expensive.
Posted By AidylP1 on 11/29/2023 3:45 PM
Posted By ElleN on 11/29/2023 3:17 PM
... and nationwide, it is common for a HOA's governing documents to authorize this. Thank you for reminding the forum of this. Posted By JohnC46 on 11/29/2023 3:15 PM
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
In our case, any expenses incurred get added to amount the owner owes versus the attorney/collector taking a piece of the amount collected.
Have an attorney handle the collections, if they have the money to pay their fees. One association uses the law firm mentioned here all the time and they are useless but expensive.
Typically once the collector/attorney is involved the owner now pays them direct. They take out their piece and forward the balance to the association.
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
boingo! attourney's only care about billing the maximum hrs possible. Last attorney quoted substantially less than $1500 for a stock CCR change, then proceed to try to overbill us and even wanted to charge the HOA 1/4 hour for writing us a thank you email. they are sharks for a reason.
vis ta vie
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Actually if that is the case, then you have no idea how to hire a lawyer. First off, many people make the mistake of hiring a lawyer on "Retainer". You do NOT need a lawyer on retainer unless you expect to defend yourself in a major trial. Otherwise nothing wrong with pay as you go for the services you need. Example: Filing a lien should cost around $0 to $500 depending in the state you live in. Just cut the lawyer the check to file the lien and done.
2nd mistake people make is hiring the wrong type of lawyer. Your HOA is NOT REAL ESTATE!!!!!!! Did I mention your HOA is NOT REAL ESTATE? It will rarely deal with a real estate issue. That does exist in some circumstances. However, your HOA is a CORPORATION. It has a CORPORATE setup. You can hire a lawyer whom specializes in HOA laws. That will be more expensive. You can hire a general lawyer to a corporate law in a HOA depending on your needs. You do NOT ASSUME you need a Real Estate attorney in a HOA.
3rd mistake people make is NOT letting ONE person be the source to talk to the HOA lawyer. It should NOT be a "free for all" to talk to the lawyer. The board should designate ONE member of the board to be approved to talk to the lawyer WITH approval. The board has question then designated the President to bring it to the lawyer. This will limit confusion and expenses.
4th. A lawyer IS going or can charge you for every email, text message, messages left, or phone conversation had with them. You need to know up front what they charge for contact. Mine charged us $28 to respond to an email. If I called their office, I would NEVER leave a message. Would wait till they were in the office. Just in case they charged me for a call back and it ends up resolved before. You have to be careful and understand what you will be paying for.
5th. HOA general membership thinking the HOA lawyer is THEIR lawyer. No the HOA lawyer is NOT every members attorney in the HOA. They are the HOA's attorney. The HOA attorney represents the ENTIRE HOA. They will be the lawyer representing the HOA if you choose to sue your HOA. Why would you talk to them? Get your own attorney.
When I hear someone blaming lawyers for the high bills they get, most of the time I think it's mostly your own fault for not knowing how it works. A lawyer is and has the right to charge you for any and all work they do. Keep using them as a resource they going to rack up the bill. Knowing how to hire and interact with a lawyer, can improve things greatly. Lessen the bills and letting them be in charge.
2nd mistake people make is hiring the wrong type of lawyer. Your HOA is NOT REAL ESTATE!!!!!!! Did I mention your HOA is NOT REAL ESTATE? It will rarely deal with a real estate issue. That does exist in some circumstances. However, your HOA is a CORPORATION. It has a CORPORATE setup. You can hire a lawyer whom specializes in HOA laws. That will be more expensive. You can hire a general lawyer to a corporate law in a HOA depending on your needs. You do NOT ASSUME you need a Real Estate attorney in a HOA.
3rd mistake people make is NOT letting ONE person be the source to talk to the HOA lawyer. It should NOT be a "free for all" to talk to the lawyer. The board should designate ONE member of the board to be approved to talk to the lawyer WITH approval. The board has question then designated the President to bring it to the lawyer. This will limit confusion and expenses.
4th. A lawyer IS going or can charge you for every email, text message, messages left, or phone conversation had with them. You need to know up front what they charge for contact. Mine charged us $28 to respond to an email. If I called their office, I would NEVER leave a message. Would wait till they were in the office. Just in case they charged me for a call back and it ends up resolved before. You have to be careful and understand what you will be paying for.
5th. HOA general membership thinking the HOA lawyer is THEIR lawyer. No the HOA lawyer is NOT every members attorney in the HOA. They are the HOA's attorney. The HOA attorney represents the ENTIRE HOA. They will be the lawyer representing the HOA if you choose to sue your HOA. Why would you talk to them? Get your own attorney.
When I hear someone blaming lawyers for the high bills they get, most of the time I think it's mostly your own fault for not knowing how it works. A lawyer is and has the right to charge you for any and all work they do. Keep using them as a resource they going to rack up the bill. Knowing how to hire and interact with a lawyer, can improve things greatly. Lessen the bills and letting them be in charge.
Former HOA President
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Our board paid its lawyer to oppose the release of an invalid lien. Too many brilliant minds for one room.
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
And that was their duty to do until they learned otherwise.
Former HOA President
TerriS6 (California)
Posts: 3,284
Posts: 3,284
Posted:
Their duty is to pay a lawyer to prevent the release of a lien they know is void? That is double breach of fiduciary duty.
WendyM5 (North Carolina)
Posts: 1,522
Posts: 1,522
Posted:
Quote:
Posted By MelissaP1 on 12/03/2023 7:41 AM
Actually if that is the case, then you have no idea how to hire a lawyer. First off, many people make the mistake of hiring a lawyer on "Retainer". You do NOT need a lawyer on retainer unless you expect to defend yourself in a major trial. Otherwise nothing wrong with pay as you go for the services you need. Example: Filing a lien should cost around $0 to $500 depending in the state you live in. Just cut the lawyer the check to file the lien and done.
2nd mistake people make is hiring the wrong type of lawyer. Your HOA is NOT REAL ESTATE!!!!!!! Did I mention your HOA is NOT REAL ESTATE? It will rarely deal with a real estate issue. That does exist in some circumstances. However, your HOA is a CORPORATION. It has a CORPORATE setup. You can hire a lawyer whom specializes in HOA laws. That will be more expensive. You can hire a general lawyer to a corporate law in a HOA depending on your needs. You do NOT ASSUME you need a Real Estate attorney in a HOA.
3rd mistake people make is NOT letting ONE person be the source to talk to the HOA lawyer. It should NOT be a "free for all" to talk to the lawyer. The board should designate ONE member of the board to be approved to talk to the lawyer WITH approval. The board has question then designated the President to bring it to the lawyer. This will limit confusion and expenses.
4th. A lawyer IS going or can charge you for every email, text message, messages left, or phone conversation had with them. You need to know up front what they charge for contact. Mine charged us $28 to respond to an email. If I called their office, I would NEVER leave a message. Would wait till they were in the office. Just in case they charged me for a call back and it ends up resolved before. You have to be careful and understand what you will be paying for.
5th. HOA general membership thinking the HOA lawyer is THEIR lawyer. No the HOA lawyer is NOT every members attorney in the HOA. They are the HOA's attorney. The HOA attorney represents the ENTIRE HOA. They will be the lawyer representing the HOA if you choose to sue your HOA. Why would you talk to them? Get your own attorney.
When I hear someone blaming lawyers for the high bills they get, most of the time I think it's mostly your own fault for not knowing how it works. A lawyer is and has the right to charge you for any and all work they do. Keep using them as a resource they going to rack up the bill. Knowing how to hire and interact with a lawyer, can improve things greatly. Lessen the bills and letting them be in charge.
Actually if that is the case, then you have no idea how to hire a lawyer. First off, many people make the mistake of hiring a lawyer on "Retainer". You do NOT need a lawyer on retainer unless you expect to defend yourself in a major trial. Otherwise nothing wrong with pay as you go for the services you need. Example: Filing a lien should cost around $0 to $500 depending in the state you live in. Just cut the lawyer the check to file the lien and done.
2nd mistake people make is hiring the wrong type of lawyer. Your HOA is NOT REAL ESTATE!!!!!!! Did I mention your HOA is NOT REAL ESTATE? It will rarely deal with a real estate issue. That does exist in some circumstances. However, your HOA is a CORPORATION. It has a CORPORATE setup. You can hire a lawyer whom specializes in HOA laws. That will be more expensive. You can hire a general lawyer to a corporate law in a HOA depending on your needs. You do NOT ASSUME you need a Real Estate attorney in a HOA.
3rd mistake people make is NOT letting ONE person be the source to talk to the HOA lawyer. It should NOT be a "free for all" to talk to the lawyer. The board should designate ONE member of the board to be approved to talk to the lawyer WITH approval. The board has question then designated the President to bring it to the lawyer. This will limit confusion and expenses.
4th. A lawyer IS going or can charge you for every email, text message, messages left, or phone conversation had with them. You need to know up front what they charge for contact. Mine charged us $28 to respond to an email. If I called their office, I would NEVER leave a message. Would wait till they were in the office. Just in case they charged me for a call back and it ends up resolved before. You have to be careful and understand what you will be paying for.
5th. HOA general membership thinking the HOA lawyer is THEIR lawyer. No the HOA lawyer is NOT every members attorney in the HOA. They are the HOA's attorney. The HOA attorney represents the ENTIRE HOA. They will be the lawyer representing the HOA if you choose to sue your HOA. Why would you talk to them? Get your own attorney.
When I hear someone blaming lawyers for the high bills they get, most of the time I think it's mostly your own fault for not knowing how it works. A lawyer is and has the right to charge you for any and all work they do. Keep using them as a resource they going to rack up the bill. Knowing how to hire and interact with a lawyer, can improve things greatly. Lessen the bills and letting them be in charge.
nope, I asked other lawyers if over billing was common and they said any lawyer that wants to bill you $100 for writing a thank you email is a crappy way to do business. Even sharks can smell bullshit. I knew exactly how it worked. Got a quote to get a STOCK CCR change that I know this lawyer had done, and he quoted is sub $1500 and then the bullshit billing came back with ridiculous time to inflate the bill on purpose because he thought the HOA would just take it up the A**. It was literally 2 emails and one phone call, but that somehow turned into hours of research for a stock CCR change. Not custom at all.
vis ta vie
MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
And you hired and paid them. I know that on average a mechanic charges $40 to $50 an hour for car repairs. There is a general time book that has"2 hours to do radiator replacement". That means I know the labor charges will be $80 to $100 for labor. Also know that the part and fluid will cost me $250. The bill expected will be around $350.
Am I now to complain of overcharging for an industry standard of the $40 to $50 an hour? Lawyers charge an hourly rate. Not unusual for it to be $100 to $500 an hour even if working on two emails. They will charge their 1 hour rate or billable hours. Welcome to reality.
Am I now to complain of overcharging for an industry standard of the $40 to $50 an hour? Lawyers charge an hourly rate. Not unusual for it to be $100 to $500 an hour even if working on two emails. They will charge their 1 hour rate or billable hours. Welcome to reality.
Former HOA President
JohnC46 (South Carolina)
Posts: 14,265
Posts: 14,265
Posted:
Quote:
Posted By ElleN on 11/30/2023 11:12 AM
I can only speak for myself. My suggestion was not the least bit casual. For years my former 2000+ HOA had been using a collection agency. Delinquencies were in excess of $400,000 by 2010 (and in 2010 dollars). Every time a collection was made, the agency took a huge chunk, like half. Successful collection just did not happen very often. Owners knew they could blow off the notices. Posted By DavidG45 on 11/30/2023 10:47 AM
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
That is how it works with collectors. But my experience with attorneys is that the attorney bills the HOA and the HOA passes this on to the owner.
It's on my list of things to work on in our HOA next year, where IMO we are throwing away tens of thousands of dollar on our attorney, who has zero incentive to actually collect our delinquent assessments; because he only gets paid when people are NOT paying their assessments.
I believe those who are casually suggesting these be handled by an attorney have perhaps not looked closely into how much their HOA is spending to collect delinquents.
Over a few years the HOA switched to a collections attorney. Foreclosure proceedings began in a few cases. There were some settlements. But delinquencies took a marked dive. I presume because word got out that the HOA with its collections attorney was now, like an attack dog, grabbing owners with its legal teeth and shaking them around until they coughed up what they owed.
Perhaps your HOA should shop around and switch attorneys.
Or go ahead and try a collections agency and watch them milk your HOA.
Sound advice.
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