Recovering Attorneys' Fees from Unit Owners

Posted by David Lindner on September 28, 2010

When a unit owner becomes delinquent or violates the association’s declaration of covenants and restrictions, who is responsible for paying the attorneys’ fees and other costs associated with recovering the delinquent assessments or remedying the violation?  Generally, the “American rule” of law is that each party is responsible for paying its own attorneys’ fees.  In other words, the responsible, rule-abiding owners must pay for an attorney hired by the association to enforce the rules.  Shouldn’t it be the other way around?  Doesn’t it make more sense that the owner who violated the rules or failed to pay his assessments should be the one to pay? 

Fortunately, in Ohio, the law supports an association’s assessment of legal costs against a violating owner in both the condominium and HOA setting.  Ohio Revised Code Section 5312.11 permits a HOA to assess an individual lot for “[c]osts associated with the enforcement of the declaration or the rules and regulations of the owners association, including, but not limited to, attorney’s fees, court costs, and other expenses.”  These fees and costs can be secured by a lien against the owner’s lot pursuant to Revised Code Section 5312.12.

In a condominium, Ohio Revised Code Section 5311.18 authorizes a condominium association to file a lien against an owner’s unit for unpaid expenses, including “[i]nterest, administrative late fees, enforcement assessments, and collection costs, attorney’s fees, and paralegal fees the association incurs if authorized by the declaration, the bylaws, or the rules of the unit owners association and if chargeable against the unit.”  Note that in a condominium the attorneys’ fees and other legal costs must be “authorized” by the association’s governing documents.  If a condominium association’s documents do not expressly authorize the collection of attorneys’ fees and legal costs, the board should consider an amendment to the declaration or rules to allow the recovery of these costs. 

Pet Rules and Restrictions for Condominiums and HOAs

Posted by David Lindner on September 02, 2010

Dog.jpgPets are wonderful.  They’ll provide a lifetime of loyalty and companionship and never ask for anything in return--except food, love, walks, vet check-ups, training, grooming, and . . . . Well, okay, pets can be a lot of work.  And when pet owners are unwilling to properly care for and clean up after their pets, they can become a real nuisance to a condominium or homeowners’ association.  Does the board have the authority to ban animals from the association altogether?  Even if it does have the power to do so, is it a smart move? 

There are a wide range of variables to consider when dealing with pet issues in your association.  Before the board even considers new rules, be sure to look closely at your current declaration and rules.  Do they prohibit pets altogether, impose restrictions on the number, size or type of pets permitted, or do they fail to address pets at all?  If the board would like to change the pet restrictions or rules, what process must be followed?  Can the board adopt a new rule without a vote of the owners, or must the owners approve an amendment to the declaration?

Once these questions have been answered, the board should be sure that it has fully thought through the impact of a rules change.  Too often, associations adopt an arbitrary rule only to find that it has unintended consequences.  For instance, a common approach is to ban dogs over a certain weight limit.  But is a 35 pound dog really more troublesome than a 30 pound dog?  And how does one enforce this restriction?  Does the board really want to go around requiring dogs to be weighed?  Will the board be willing to have a perfectly well-behaved dog removed because, (like many of us), it has gained weight as it aged? 

Another trap boards fall into is banning dogs and/or cats altogether.  I won’t say that this is always a bad move, because if the owners want their community to be pet-free, then they have the right to enact rules or restrictions as specified in their governing documents to accomplish that goal.  The unintended consequence of this action, however, is that the owners may severely limit the pool of potential buyers for their homes.  According to a Gallup poll, 44% of Americans own a dog, and 29% own a cat.  Only 40% of Americans do not own any type of pet.  By banning pets, the Association eliminates a large group of potential home buyers in an already difficult market.  The Association must also understand that under state and federal law, service animals cannot be prohibited for disabled owners. 

While no set of rules will fit every association, a board considering new or additional pet restrictions should consider these points:

  • Unless there is a designated, enclosed area for pets to run free, the rules should require all pets to be on a leash and attended by their owner when outside a unit.
  • Think carefully before imposing a size limit on dogs.  A large dog can be quiet and well-behaved just as a small dog can be loud and disruptive.
  • Be specific about what types of pets are permitted and/or prohibited.  Most of us think of dogs and cats as typical household pets but, for some people, pot-bellied pigs, snakes, rats and other creatures are “pets.”
  • The rules should make it clear that every owner is responsible for his or her pet, including the prompt clean-up of its mess.  Owners should be required to pay the cost of any clean-up the association is required to undertake because of an ill-behaved pet, including attorneys’ fees and enforcement assessments (to the extent permitted by local law and the governing documents).
  • Consider “grandfathering” current pet-owners if the rule change would cause them to be in violation.

With these guidelines, and input from the owners, the board should be able to craft appropriate rules and restrictions tailored to the needs of their community. 

 

Photo credit: Flickr user digital_image_fan

Enforcement of HOA Restrictions Can Be Costly

Posted by David Lindner on August 13, 2010

The enforcement of HOA restrictions can be a costly matter for an association, particularly when the association goes to court over the issue and loses.  Take the case of the Eagles Master Association in Hillsborough County, Florida, where the Master Association sued an owner who it claimed violated the Master Association’s restrictions by parking his pickup truck in his driveway.  In the Master Association’s interpretation of the restrictions, owners were required to park their trucks out of view in their garages.  The owners, Mr. and Mrs. Vizzi, contended that the restriction applied only to commercial vehicles, not personal vehicles like their truck. 

At the root of the conflict was a provision in the master declaration prohibiting the parking of any trucks or vans upon an owners’ property except out of view in a garage.  The declaration for the sub-association in which the Vizzis lived, however, only prohibited commercial vehicles from being parked in driveways.  In its Order (pdf), the court found that the conflict had to be resolved in favor of the free use of the owners private property and the apparent intent of the developer. 

Clearly the intent of both documents was to permit personal trucks, SUV's, minivans, and vans to be regularly parked in the driveway and to require commercial vehicles, which were deemed unsightly in a residential environment, to be garaged and out of the public's view. This is a more rational interpretation of these Declarations, reconciles provisions which have been argued by the parties as being in conflict, and gives a reasonable, lawful, and effective meaning to all of the terms of both Declarations.

The court reasoned that the intent of the master declaration was actually to prohibit only commercial vehicles, not all trucks, SUVs and minivans used for personal purposes.  As such, summary judgment was granted in favor of the owners.  But, the story doesn’t end there.  Not only did the Master Association lose the case, it was also required to pay the Vizzis’ attorneys’ fees in the amount of $187,443.37!  Imagine being a member of the board of directors of Eagles Master Association and having to explain this at your next annual meeting.

All too often, disputes between owners and their association become personal and therefore more difficult to resolve in a reasonable way.  The parties become entrenched in their positions and unwilling to compromise.  In many cases, the association fears setting a bad precedent by settling and the owner becomes unwilling to back down because they see it as a battle of David vs. Goliath.  Of course, settlement is not always the answer.  The restrictions are put in place for a purpose and it’s the association’s job to enforce them.  However, where restrictions are vague or conflicting, the association may want to think twice about rushing to court.  Not only does it risk an adverse judgment, but the process is costly and often upsetting to the community.  A better approach for Eagles Master Association may have been to meet with owners to better understand the issues, then seek to amend their documents to clarify the restriction before proceeding with enforcement action.