When a homeowners’ association (HOA) takes legal action against a homeowner for violating the association’s covenants, it may incur hefty legal fees. In many cases, these fees must be paid by the homeowner who committed the violation, but certain legal procedures must be adhered to.
HOAs may recover attorney fees for various reasons. First, the covenants, conditions, and restrictions (CC&Rs) are part of a legally binding contract between homeowners and the HOA. This contract may contain language that allows the HOA to collect reasonable attorney fees from homeowners. There are also Arizona statutes that allow HOAs to collect attorney fees. Even so, there are rules to follow when collecting these fees, and you should ask your attorney for help.
Contact our Arizona covenant enforcement lawyers for a private legal assessment by calling Halk, Oetinger, and Brown at (602) 759-9205.
Can HOAs Recover Attorney Fees from Homeowners in Enforcement Cases?
HOAs may incur legal fees when taking legal action to enforce compliance with the association’s covenants. In many cases, the HOA may pass these legal fees on to homeowners.
Breach of Contract
The HOA’s CC&Rs are part of a binding legal agreement between the HOA and homebuyers. If a homeowner violates a covenant, they are in breach of contract, and the HOA may take legal action to enforce compliance.
The contract may include language stating that the homeowner must pay attorney fees if the HOA takes legal action against them and wins. In that case, the terms of the contract must be upheld, and the HOA may collect attorney fees.
Successful Enforcement
An HOA may recover attorney’s fees, but only if its legal action is successful and it obtains a judgment in its favor. If there is no final judgment on the matter, an HOA may be unable to collect attorney fees from the homeowner.
For example, if the HOA sues a homeowner but the homeowner decides to cure the violation, the HOA may withdraw the case. Since the case is withdrawn, there is no final judgment, and the HOA may not collect attorney fees from the homeowner.
Fees Must Be Reasonable
If an HOA can collect attorney fees, it must make sure that the fees are reasonable. The HOA may not collect exorbitant legal fees that are disproportionately high compared to the legal services rendered.
If an HOA plans to collect attorney fees, it should be ready with an itemized list of the legal services its attorney provided and the associated costs. Our Arizona covenant enforcement attorneys can provide you with detailed explanations of services and fees so that you can collect attorney fees from homeowners.
How Do HOAs Collect Legal Fees During Enforcement Cases in Arizona?
HOAs may recover attorney fees from homeowners in various ways. The best method may depend on your specific situation. The predominant methods include contract terms and liens.
Contract Terms
Again, many HOAs are authorized to recover attorney’s fees according to the association’s documents. Review your associations’ CC&Rs and any other documents pertaining to the HOA and homeowners in the community. There is a good chance that the homeowner has already agreed to pay attorney fees when they purchased the property.
Liens
Arizona statutes permit HOAs to collect attorney fees when they place liens on property. If the HOA obtains a judgment allowing it to place a lien on someone’s property, the judgment may include the costs of reasonable attorney fees.
This means that to remove the lien and clear the property’s title, the homeowner would have to pay whatever fines or fees they owe, in addition to reasonable attorney fees.
How Should HOAs Handle the Collection of Attorney Fees in Enforcement Cases?
When collecting attorney fees, HOAs must exercise caution, as certain laws and procedures must be followed.
Careful Wording of CC&Rs
As mentioned, HOAs may include language in their CC&Rs that allow it to collect attorney fees from homeowners. The wording of this language must be specific, clear, and reasonable. Overly vague terms, or those that are confusing or impossible to understand, might be unenforceable.
Fees for Legal Action That Was Not Finalized
An HOA cannot collect legal fees for legal actions that were never made final. For example, if an HOA sues a homeowner for unpaid fines or fees, the HOA cannot recover its legal fees if the lawsuit is not finalized and there is no judgment.
If the homeowner agrees to pay before a lawsuit is completed, they cannot be required to pay legal fees unless specifically authorized by the court.
Formally Seeking Attorney Fees in Legal Action
If an HOA files a lawsuit against a homeowner, it should specifically include a claim for attorney fees. If these fees are not claims, the court cannot award them, even if the HOA wins the case.
In the 2018 Arizona case of Bocchino v. Fountain Shadows Homeowners Association, the Court of Appeals of Arizona ruled that an HOA could not unilaterally assess attorney fees against a homeowner because the HOA neither requested them during the case nor had them awarded by the court.
FAQs About HOAs Recovering Attorney Fees in Arizona Enforcement Cases
Can HOAs Collect Legal Fees from Homeowners in Enforcement Cases?
Yes. HOAs may recover attorney’s fees under the terms of the HOA’s contract with the homeowner. The contract contains the covenants, conditions, and restrictions that the homeowner must follow, as well as terms governing how the HOA may collect fees, including legal fees.
Are There Limits on How an HOA May Collect Attorney Fees?
Yes. Attorneys may not unilaterally impose attorney fees. They must take legal action, specifically claim attorney fees, and obtain a final judgment against the homeowner. Additionally, attorney fees must be reasonable. Hos may not claim fees that are too exorbitant or out of proportion to the legal services they actually received.
Can an HOA Collect Legal Fees for a Lawsuit if The Homeowner Complies Before the Lawsuit is Filed?
Probably not. A key aspect of obtaining attorney fees after taking legal action is that the HOA must obtain a judgment. If the legal action is stopped or withdrawn because the homeowner has cured the violation, the HOA may not collect attorney fees.
What Should HOAs Do Before Attempting to Collect Attorney Fees in Enforcement Cases?
Before seeking to recover attorney fees, an HOA should review the CC&Rs to ensure it is authorized to collect such fees. They should also make sure that they specifically claim attorney fees when taking legal action against a homeowner.
Contact Our Arizona Covenant Enforcement Attorneys Today
Contact our Arizona covenant enforcement lawyers for a private legal assessment by calling Halk, Oetinger, and Brown at (602) 759-9205.
