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If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: mikebw
Date: February 11, 2013 11:50AM
Apparently someone in our neighborhood decided that the company in charge of running the HOA wasn't doing something correctly and filed a lawsuit against them. We learned about this via a letter from the HOA that was notifying us that there was little room in the budget for legal counsel, and should the court decide against the HOA that the homeowners fees would probably have to go up to cover that.

So from what I gather, if the HOA is doing something illegal or against our interests as members, that we have to pay for it? Doesn't seem legal to me. They should be responsible for their own actions.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: C(-)ris
Date: February 11, 2013 11:55AM
I would suggest suing the HOA for the increased costs plus damages for agravation. At the very least, if you win, all your neighbors will have to split the costs and you will get a nice lump sum.



C(-)ris
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Edited 1 time(s). Last edit at 02/11/2013 11:56AM by C(-)ris.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Mr Downtown
Date: February 11, 2013 11:59AM
You seem to misunderstand the fundamental nature of an HOA. You are the HOA. They're not some outsiders who are doing something to you. If you don't think they are making the right decisions, your recourse is to elect representatives who share your views, or stand for election yourself.

Once you do, you'll see that the issues aren't so cut-and-dried. Judgment calls must be made, and decisions have to be taken about liability, about fiduciary responsibility, about labor contracts, and about what the law requires in areas where the law offers little guidance and the HOA lawyers can think only in terms of litigation. Human failings have to be accommodated, and the question always present is whether to be strict about adherence to the rules and regs, or possibly give up the ability to enforce them in the future against something that really threatens neighborhood stability and values.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: MEG
Date: February 11, 2013 12:03PM
I'm not a lawyer but the HOA is Mike and his neighbors - as part of the association they are responsible for any costs.

What's not clear is what's in issue - the policies of the HOA or the actions of the 3rd party management company. If the policies of the HOA are what's at issue, the choices are don't fight the lawsuit and the HOA members are responsible for the summary judgement (presumable against them). Fight the lawsuit and they'll have to fund the legal defense. If the management company is what's at issue, then the HOA should not have to fund them and I would move to drop them.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: M A V I C
Date: February 11, 2013 12:06PM
Is the HOA being sued or the third-party management group? That's your answer. There's probably insurance for the HOA to protect against this.




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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Buzz
Date: February 11, 2013 12:07PM
That's exactly what insurance is for. Your HOA should have insurance, and you should have your own insurance for your unit that also covers HOA screw ups. You should never have moved moved in without both insurances in place. Many lenders won't write loans on condos without it.


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and then there's times when it's really better.



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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: cbelt3
Date: February 11, 2013 12:17PM
It also depends entirely on your HOA's constitution.

Usually HOA lawsuits involve named individuals.. because one of the little weasels that likes to take power over others let their tin god complex overwhelm what little sense of reality they had. And the HOA's best defense is often to throw the malefactor to the wolves.


Good luck !
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: mikebw
Date: February 11, 2013 12:18PM
Quote
MEG
What's not clear is what's in issue - the policies of the HOA or the actions of the 3rd party management company. If the policies of the HOA are what's at issue, the choices are don't fight the lawsuit and the HOA members are responsible for the summary judgement (presumable against them). Fight the lawsuit and they'll have to fund the legal defense. If the management company is what's at issue, then the HOA should not have to fund them and I would move to drop them.

Sorry I was not more clear. Someone is taking the management company to court over how they have managed a few issues (like previous rate increases being of too large a percentage, as well as the election process for new HOA members).
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Black
Date: February 11, 2013 12:18PM
.




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Edited 1 time(s). Last edit at 02/11/2013 12:21PM by Black.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Black
Date: February 11, 2013 12:21PM
Quote
mikebw
Quote
MEG
What's not clear is what's in issue - the policies of the HOA or the actions of the 3rd party management company. If the policies of the HOA are what's at issue, the choices are don't fight the lawsuit and the HOA members are responsible for the summary judgement (presumable against them). Fight the lawsuit and they'll have to fund the legal defense. If the management company is what's at issue, then the HOA should not have to fund them and I would move to drop them.

Sorry I was not more clear. Someone is taking the management company to court over how they have managed a few issues (like previous rate increases being of too large a percentage, as well as the election process for new HOA members).
Are they dong so as private parties or on behalf of the HOA?




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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: mikebw
Date: February 11, 2013 12:24PM
Quote
Black
Quote
mikebw
Quote
MEG
What's not clear is what's in issue - the policies of the HOA or the actions of the 3rd party management company. If the policies of the HOA are what's at issue, the choices are don't fight the lawsuit and the HOA members are responsible for the summary judgement (presumable against them). Fight the lawsuit and they'll have to fund the legal defense. If the management company is what's at issue, then the HOA should not have to fund them and I would move to drop them.

Sorry I was not more clear. Someone is taking the management company to court over how they have managed a few issues (like previous rate increases being of too large a percentage, as well as the election process for new HOA members).
Are they dong so as private parties or on behalf of the HOA?

Private party. The notice we received identified them as a resident of the neighborhood but I do not know them.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Black
Date: February 11, 2013 12:32PM
Quote
mikebw
Quote
Black
Quote
mikebw
Quote
MEG
What's not clear is what's in issue - the policies of the HOA or the actions of the 3rd party management company. If the policies of the HOA are what's at issue, the choices are don't fight the lawsuit and the HOA members are responsible for the summary judgement (presumable against them). Fight the lawsuit and they'll have to fund the legal defense. If the management company is what's at issue, then the HOA should not have to fund them and I would move to drop them.

Sorry I was not more clear. Someone is taking the management company to court over how they have managed a few issues (like previous rate increases being of too large a percentage, as well as the election process for new HOA members).
Are they dong so as private parties or on behalf of the HOA?

Private party. The notice we received identified them as a resident of the neighborhood but I do not know them.

So they are not suing your HOA, and you are not suing the management company.
It's a private party suing the company contracted by your HOA to handle the daily administration.
Sounds like you're not involved in any way, =unless= the management company has some sort of clause that the HOA agreed to that makes the HOA responsible for legal fees relating to your HOA. So back to zero?
One important caveat-- I have no experience with HOAs :-)




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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: tahoedrew
Date: February 11, 2013 12:36PM
Quote
mikebw


Sorry I was not more clear. Someone is taking the management company to court over how they have managed a few issues (like previous rate increases being of too large a percentage, as well as the election process for new HOA members).

Then that's easy: the HOA board of governors would be IDIOTS if they didn't vote to drop the management company.

HOA management companies are a dime-a-dozen with HOA's running rampant themselves.

And your HOA should have a contract with the management company for a fee. If they raise their rates prior to the end of the contract they've violated the contract. Therefore, it becomes even easier to drop them and face no legal repurcussions as they violated the contract.

~A
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: GGD
Date: February 11, 2013 12:43PM
But it seems that the HOA would need to sue the management company, not sure how just an individual could pull this off, the contract is not with the individual, it's with the HOA. I supposed the individual could try to sue the board member that picked the management company.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: mikebw
Date: February 11, 2013 12:44PM
OK, this helps a little. The problem as I understand it is that the management company saw fit to increase our dues by more than 10% one year which the private party alleges to be illegal. They also somehow botched the election process for a new HOA president.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: mikebw
Date: February 11, 2013 12:45PM
Quote
GGD
But it seems that the HOA would need to sue the management company, not sure how just an individual could pull this off, the contract is not with the individual, it's with the HOA. I supposed the individual could try to sue the board member that picked the management company.

I'm thinking maybe they wanted to run for President, and didn't get elected, for what seems to be an illegal reason.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: SDGuy
Date: February 11, 2013 12:59PM
Quote
mikebw
OK, this helps a little. The problem as I understand it is that the management company saw fit to increase our dues by more than 10% one year which the private party alleges to be illegal

? - I would think the HOA Board decides on what the dues will be (at least that's how every HOA I've ever been on runs things) - but this may be a California thing
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Marc Anthony
Date: February 11, 2013 01:04PM
The management company is not your HOA; they are a separate entity. Does your contract with them hold them harmless for any mistakes? Are they blaming the issue on your Board of Directors? The contract between your HOA and the management company, as well as your covenants, will probably hold more insights than anyone here can give you. If you feel in the dark about the issue, you may have the right to demand a meeting of the Association. If there is a legal issue for which you are partly responsible, I would dispute any increase in dues; that's really more cause for a one-time special assessment than a permanent increase.



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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: MEG
Date: February 11, 2013 01:10PM
Quote
mikebw
OK, this helps a little. The problem as I understand it is that the management company saw fit to increase our dues by more than 10% one year which the private party alleges to be illegal. They also somehow botched the election process for a new HOA president.

The lawsuit should specify the defendant(s). If the HOA is a listed party then the HOA is responsible for costs unless they can opt out of being co-defendants somehow.

Again, not a lawyer, but the dues are determined by the budget requirements, not the management company - should be a pretty cut and dry explanation of why the dues jumped and provided it's an accurate budget there should be no basis for it being "illegal" unless your HOA bylaws put a cap on a year-to-year increase in dues (doubtful) or the management company was grossly negligent in management of your funds (but that'd be another issue and they'd be sued by the HOA, not an individual).

Ditto with the election process - they're usually pretty straight forward: quorum of association members, count the votes, most wins.

Sounds like someone being pissy about the raised dues and just lost the election?
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: cbelt3
Date: February 11, 2013 01:18PM
Whatever the issue.. watch them suckers like a hawk. A co-worker's HOA lost ALL their funds to embezzlement, and had to triple the dues for five years to cover it (the ex-President had no way to pay 'em back).

HOA's suck. I'm SO glad to be out of my HOA controlled house. Frickin' busybody weasel bastiches.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Bill in NC
Date: February 11, 2013 02:00PM
Increase in dues w/o a vote should be covered in your HOA's bylaws - for my HOA it's limited by the increase in the CPI (though we don't automatically raise dues each year)

Embezzlement would have been covered by an "officers and directors" insurance policy - a few hundred bucks annually for $1 million in coverage even for willful acts.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Racer X
Date: February 11, 2013 05:57PM
People buy houses so they don't have to deal with this crap. Why buy a house/condo and give others say and control?
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Black
Date: February 11, 2013 06:08PM
Quote
Racer X
People buy houses so they don't have to deal with this crap. Why buy a house/condo and give others say and control?

The standard counterargument is that you have someone else to worry about upkeep and repairs for you...

(I'm with you though-- never...)




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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: dmann
Date: February 11, 2013 06:54PM
Quote
Racer X
People buy houses so they don't have to deal with this crap. Why buy a house/condo and give others say and control?

I hope this is an honest question and not a rhetorical judgement call. I'll answer as if it is the former and not the latter:

My mom has no interest in apartment living, but is not able to maintain property. She can't mow the lawn or shovel snow. For her, having a house/townhouse with a HOA set-up is a happy medium.

I am single, live alone and travel frequently for work. Working on the lawn and shoveling snow are NOT what I want to be doing when I'm home and those two things left untended when I'm away simply say, "I'm out of town! Come rob me!" Condo living is the right decision for me at this point in my life.

DM
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Racer X
Date: February 12, 2013 12:37AM
If you are willing to surrender control, it's an OK option.

My parents have owned a condo and now a home in a retirement community both with a HOA. Far more trouble than it has been worth.



Edited 1 time(s). Last edit at 02/12/2013 12:59AM by Racer X.
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Robert M
Date: February 12, 2013 08:53AM
Racer,

You surrender a significant amount of control but you also receive a significant number of benefits such as those mentioned in the thread. It's nice to not have to shovel snow in the winter. Trust me on that. But, a owning a regular home doesn't give you ultimate authority over it. You still surrender a certain amount of control over your home and property and must live within the confines of local code. For example, you may not be allowed to cut down a tree without village approval, or build a fence that is over a certain height, etc. You may not even be allowed to put a shed in your backyard.

Robert
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Re: If someone sues my HOA and the HOA loses, can I be made to pay for the legal fees?
Posted by: Bill in NC
Date: February 12, 2013 10:48AM
yep, for multi-family like condos/townhomes HOA dues normally mean no exterior maintenance costs.

re-painting exterior, landscaping, cleaning gutters, roof all covered by the monthly fee.

most residents here are elderly who moved from larger single-family homes after the kids were grown.
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