In house Attorneys

Nancy,

My association has quite a few legal issues related to bankruptcy right now. We have an attorney that we use for our legal matters, but he is used very little due to how small our association is. I know attorneys are expensive, but $160K seems pretty steep to me. How many units/homes are in your association. Is the attorney available for personal use by your members at no additional fees to the co-owner? One thing you might explore is the price you would have to pay for a contract with a law firm. As with maintenance contracts, I have to believe a law firm would be willing to enter into an annual contract with your association. I think it is at least worth exploring.

Kevin: What I was looking for was how many HOA's out there felt the need to hire "in house" attorneys to keep current on legislation that becomes new law. Or is this something our Mgmt Co's should advise us on.

NancyM2

I can't imagine a board of directors of a 545 home community hiring an attorney for $160k a year to attend board meetings and keep them current on the laws. The attorney should be dis-barred for charging such an onerous fee, and the board members who hired him should all be recalled.

New laws are enacted once each year and it takes a couple of hours to study them. So what does this in house attorney do for for the board when s/he is not at the meetings?

Let's say it takes him 16 hours to study the new laws and make a report for the board. Also assume the board has monthly meetings. Call it three hours per meeting for 12 meetings. That's 36 hours of meetings and 16 hours of reporting on the new law.

Now lets say that he also spends another 80 hours doing stuff for the board. Now we have a total of 132 hours.

Lets throw in another 80 hours just for kicks. That's 212 hours. That is $754 dollars per hour for this attorney. Pretty steep if you ask me. And what are you getting for that money. Nothing really.

And he is also free to work for other clients (not community members)

If he can get about 5 more irresponsible community boards who are willing to cough up $160k he can make aout $800,000 per year and only work 1000 hours.

An HOA rarely needs an attorney. So this is a negligent waste of the community funds, in my opinion.

Hi Nancy:

I'm in Oregon. Our attorney works for a firm that does HOA work, and he specializes in that field. He does attend our HOA Board Meetings and does work for the association as needed. Since he specializes in the HOA field, he doesn't need to get up to speed on HOA laws on our nickel, as he already does it as a member of his firm.

If your lawyer doesn't specialize in HOA law, you might want to pursue one of the firms in your area that does.

We're a master-planned community. When I managed a portfolio of smaller HOA's, they all had attorneys but the lawyers never attended meetings unless the Board requested it.

Your board may be in "overkill" mode, or maybe the California laws really require it?

If you want to find local HOA law firms, go to the CAI website (www.caionline.com), then find the link to local chapters, find the one closest to you and hunt in that website for the law firms that are members.

J. Patrick Moore, CMCA

William ~ thank you for your reply ~ it does seem a little over the top, I have been complaining about this to our board for a while now. But it falls on deaf ears.

Thanks again
NancyM2

Hi Nancy:

I don't have a breakdown of his charges. He attends our board meetings (about two hours per month plus any reading of management report prior) but also his company handles the collections process for us, and is working on a lawsuit for us as well. The total charges for his company for 2006 were $24,000 and change. I would guess that his rate is somewhere around $200 per hour, so the charges for attending meetings, answering emails related to board business, etc. would be somewhere in the range of $300 to $500 per month.

The other charges (lawsuits, collections, etc.) are generally collected from the owners unless the fees are uncollectable. So, we're looking at roughly $3600 to $6000 per year for his services.

Do you think that your owners would go for lower assessments?

J. Patrick Moore, CMCA

Joseph;
Makes sense about Mgmt Co's getting in trouble. It would make sense to only hire attorneys that specialize in HOA law
Our attorney was hired to clean up a bunch of legel stuff left over after we settled a "Class suit" that brought us to our knees several years back. I was on the board that originally hired her, never thinking she would be still be around four years later. This attorney is the one that recommended the Mgmt Co. we now use, at double the last Mgmt Co's fee. these were friends of hers, so no other bids were requested at that time. She is the goose that laid the golden egg. Therefore they support her as well. When ever I bring up the subject at a board meeting, I am shouted down by the board President. and told not to be so critical. Makes one want to come home and eat worms.

When we hired her several years ago, she said she had lots of HOA experience ~ Turns out the only HOA attorney she ever worked for fired her. I found that out quite by accident.

NancyM2

There are also the option to contract a consumer Attorney at law cost in case of MORTGAGE problems.Specially when the homeowners are victims of predatory lending

Dear David
I agree with you, this is a battle I have been fighting with our board about for several years now, but then I'm stupid enough to keep going to the meetings. Last meeting when our Pres told us that the Insurance attorneys handle most of the business with the two active law suits we have. I spoke up and asked ~~ Why do we need an on-house attorney then ????? ~ He shouted at me, and said "I know you hate her(the attorney)" but I'm tird of you being so critical. It would seem my words fall upon deaf ears, as no one ever attends the meetings. Wait until we have a dues increase, maybe they will hear me then. This forum makes me feel better, at least someone hears me.

NancyM2

Attorney's specializing in HOA are few and far between. Plus many of them get burned out quickly. I would suggest finding lawyers that are familiar with Corporate/business and contractual law. Your dealing with a corporation and most dealings are considered contractual. A real estate attorney basically checks for free titles and sales of houses. They aren't much into the other stuf HOA's deal with.

I wouldn't hire an In-house attorney. It is typcially a Retainer fee, hourly rate, court costs, office expenses, and advice calls/emails. They will charge you for each phone call or email so be careful on the questions/advice. Be way careful of the attorneys that will take a case on contigency when it involves foreclosures. There's usually something more in it for them if they deal with real estate or have friends that do.

Just some heads up information you should have when shopping for an attorney. Plus a HOA doesn't need an attorney but for court appearances, maybe help file a lien/foreclosure, or sometype of very serious notification letter. Your wasting your money most likely to keep one around just for the advice aspect. Plus it creates the vicious lawsuit cycle.

My best suggestion is to take a few course in college on law. I took Business law and Criminology at a local college. It helped tremendously and less legal consulting. It may help. Good luck!

Nancy:

I have been in association management for 25 years and have never seen the need to have an attorney in-house for $160,000.00 a year. Attorney's are used on an as needed basis. If it smells like fish.....