My HOA obtained a judgement against me for $1200. Why do I now owe them $6000?!

If you live in a homeowners association and have ever fallen behind on your assessments, chances are good you received one or more letters threatening legal action.  If you have been unlucky enough to be sued by your homeowners association and lost, chances are very good that your homeowner association has added court costs and attorneys’ fees to the amount of the unpaid assessments.  Arizona law and homeowners association’s governing documents generally permit a homeowners association, if successful in court, to include its costs and attorneys’ fees in addition to the unpaid assessments in any judgment it obtains against you.

The next step would be for the homeowners association to try to collect its judgment. This might include demand letters, wage garnishments, or other collection methods.  A common scenario that we see is that the homeowners association never limits its collection to the amount of the judgment and in most cases seeks to collect several thousand dollars, sometimes three or four times, or more, greater than the amount of the actual judgment, as part of its collection efforts.  So that small judgment against you of $1,200.00, which you ignored, has suddenly turned into a wage garnishment of $6,000.  And the amount continues to grow.

The homeowners association will defend the increase as part of its perceived right to collect costs and fees in connection with the original lawsuit.  But whereas the fees and costs incurred getting the judgment may be recoverable, it is our position that a homeowners association and its lawyers do not have the unilaterally right to increases a judgment in order to collect such additional amounts. 

Generally, “a judgment must be a clear, ascertainable debt” that does not have prospective application. Reeb v. Interchange Resources, Inc. of Phoenix, 106 Ariz. 458, 459 (1971).  A party seeking to collect such a judgment should not have the right to decide how much you owe—after all, isn’t that the purpose of the judgment?  A judgment is a piece of paper that you should be able to determine, at any given time, exactly how much you owe.  Let’s say you want to pay off that judgment, so you call up the association’s lawyer.  It is not fair that the lawyer can give you one number in the morning when you call and another number later that afternoon when you call back to give your credit card. When the party trying to collect the judgment is increasing that amount in random amounts, without seeking court approval, it is in our opinion an abuse of the legal process and the judgment itself bordering on extortion. 

Where the homeowners association or its lawyers has threatened to garnish wages, or garnished wages, in excess of the amount of the judgment, you are not without legal rights.  In addition to challenging the garnishment, the federal Fair Debt Collection Practices Act also may afford a remedy to you to recover damages for misrepresenting the amount of the judgment, collecting more than the amount of the judgment, and other unfair collection tactics.

If you believe you are a victim of an over-aggressive homeowners association that is threatening to collect, collecting, or has collected more than its judgment against you, you should seek legal representation to determine whether you have a case.