The HOA Attorney's Fees Trap
I hope you all had a nice Thanksgiving holiday. For this newsletter, I would like to emphasize how disputes with your homeowners association ("HOA") can spiral out of control because of the issue of attorney's fees.
In our firm, we have represented many homeowners in disputes with their homeowners associations. Sometimes these disputes make their way to the court system. Whether it is a dispute over alleged past due assessments, the condition of your yard, or other compliance concerns, the issue of attorney's fees looms large and can be a trap for the unwary homeowner.
Let me briefly explain how this goes down:
Your HOA sends you a letter saying that you owe a $25 late fee. You dispute the late fee, so you call up the association and even attend the next board meeting, and they refuse to waive the fee. The association threatens to refer the matter to its attorney if the fee is not paid. Next you receive a letter from the law firm representing the association.
The letter says that you owe $25 for the late fee plus $250 for attorney's fees. Now your $25 problem has quickly become a $275 problem.
You call the HOA's lawyer and argue about the situation. The lawyer probably is charging your account for the time spent discussing your account with you. After the call, you are even more frustrated and now your balance will be even higher because the lawyer just charged your account for the time spent on the phone call.
Next you receive another letter from the lawyers. Now the attorney's fees are up to $500 so now your $25 problem is a $525 problem. This letter threatens a lien and a foreclosure suit unless you pay the full amount demanded.
Standing by your principles, you refuse to pay the full amount demanded, which includes the attorney's fees you find to be unjustified. Next you are served with a lawsuit by the HOA's lawyers. Because the lawyers have drafted the lawsuit and the HOA has incurred filing fees and service of process fees, your $25 problem is probably more than a $2,000 problem.
The issue: the HOA's governing documents permit the association to recover reasonable attorney's fees incurred and Florida Statute 720.3085 permits the HOA to recover reasonable attorney's fees for any action to foreclose on its lien. The HOA is not required to accept any particular settlement offers and is entitled to seek the full amount it claims to be due.
This puts the homeowner in a dangerous situation that can spiral out of control and sometimes even lead to the foreclosure and loss of your home, even if you are current on your mortgage.
The obvious takeaway: if you are having a dispute with your HOA, resolve it as quickly as possible, preferably before the HOA gets its lawyers involved. If the HOA is not working with you in good faith, contact a competent consumer attorney as soon as possible.
The Florida Legislature could do something about this by amending Section 720.3085, but I would not hold my breath on that happening.
I hope this information will be helpful to you!
We are archiving all of our newsletters, so if any of you would like to review any of the previous newsletters, you can read them by clicking HERE.
Thank you for reading and I hope you have a great evening.
Have a great Sunday!
Ryan Torrens, Consumer Litigation Attorney
Disclaimer: The information provided in this email does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this email is for general informational purposes only.
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