Can an Hoa atty own property & handle collections, legal fees, atty fees, etc in the same association that is his client?

Asked over 1 year ago - Glen Burnie, MD

The atty for my HOA is a very aggressive collector, if you can't pay in full within 30 days of him sending a letter (includes interest, legal fees, admin fees, cost of collection, etc) he will file for a lien on property (another $700) even if you are on a payment plan with him and accelerate the assessments for the remaining year. He then sends an intent to foreclose letter in which he is the trustee in the foreclosure. He also owns several units in the HOA. It seems to be a conflict of interest and/or violation of Code of Conduct. In relation to his fees, many owners have lost their homes to him because they can never catch up with the fees they owe him.

Attorney answers (1)

  1. Matthew Scott Berkus

    Contributor Level 20

    Answered . Most conflict of interest issues fall into a grey area, and most conflicts can be waived with informed consent. In this case, the issue is more of a "potential" conflict. I don't think there is an actual conflict on the mere fact that the attorney is also a member of the association. The HOA board may hire competent counsel to represent the HOA's interests. It is no different than the General Counsel of IBM owning stock in IBM.

    It might be helpful to think of the Association as a "separate" entity (which it is). The attorney represents the entity, which is separate and apart from the members, the individual owners. The potential conflict I think is only that if the attorney was violating the CC&R's and the board took no action or failed to hire a different attorney to pursue him/her. Now, if the attorney is self dealing, e.g. initiating foreclosure and then bidding and winning the foreclosure, that could be a potential problem. Also, the attorney probably couldn't both be the HOA's attorney and a board member.

    On the way the attorney collects, so long as he is abiding by state law and the CC&R's, that is all that can be expected.

    If you really wanted to get aggressive, you could call a special member meeting (based on your CC&R's) and vote to remove the attorney...however, that would take some serious organizing.

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