Collection Defense

Are you being sued by your HOA?

Whether you have been served with a lawsuit, learned about a lien, or just received a demand letter, it is never too soon to speak with a lawyer to advise you about your rights. Do not ignore it and do not wait. Any delay can result in your HOA and its lawyers trying to add additional fees and bogus to your account and there is one thing that our experience has taught us: The longer you wait, the harder it becomes to get rid of those charges and fees. You might think, or even know, that they wrong, but doing nothing is never an option. They most likely will eventually sue you and, if you do nothing, they will get a judgment against you.

Chances are that your homeowner's association has hired a collection lawyer. By the time they file a case in court, it is not uncommon that the ledger they show the judge includes thousands of dollars in vague collection charges, attorneys fees and costs. You might think that you are current or that maybe you're just one or two payments behind. But they will say you owe far more than that. 

One facet unique to most HOA judgments, in contrast to other types of judgments, is what we call the blank check. Judgments are supposed to be for a definite amount. Most of the lawyers representing HOAs that we have encountered, however, add self-serving language purporting awarding themselves attorneys fees and costs incurred trying to collect the judgment. The HOA lawyers then decide for themselves what additional fees they believe are reasonable (hint: all of them) and then automatically include those fees as part of any collection effort without ever going back to court.

The result is that a judgment for a few hundred dollars often balloons into a judgment of several thousand dollars. Garnishments continue well beyond the face amount of the garnishment because the lawyers have included the attorneys fees incurred in obtaining the garnishment as part of the garnishment — and even though Arizona law expressly prohibits a judgment creditor such as the HOA from collecting fees against the owner in a garnishment. One attorney candidly admitted to an owner that the amount of the judgment just increased because he had to answer the phone to tell the owner the balance of the judgment.

This abusive practice often preys on the unrepresented owner and an over-worked court system and often results in the HOA or its attorneys incurring thousands of dollars to which they are not entitled. We have not found any other area of the law where judgments include the right to prospective attorneys’ fees. Yet the practice is so commonplace that many judges do not even question it.

We believe in early intervention. We strongly encourage every homeowner who lives in an HOA to request in writing a copy of his ledger and to call us immediately if the ledger reveals any irregulaties. Sadly, many of the cases that we see are default judgments where you, the homeowner, didn't even know there was a lawsuit in the first place! It is shocking the number of lawsuits in which the HOA says they cannot find you. They know where you live, they send you mail every month, and they are your neighbors. But when the case ends up in court, the HOA and its lawyers suddenly claim they cannot find you, or tell the court that they do not know where you live, or accuses you of "ducking" service because you were not home the two or three times that the process server knocked on your door.