By Joseph Adams, Managing Shareholder at Becker & Polliakoff, on November 2nd, 2015

Posted in Reader Q&A

Question: My homeowners’ association is in a dispute with our prior law firm regarding the payment of legal fees. We have not been able to come to a settlement and are currently scheduled to go to trial later this year. Our question is can the winning party recover their attorneys’ fees and costs in such a dispute?  C.D. (via e-mail)

Answer: It depends. In America, unlike many other countries, there is no inherent right for the winning party in a lawsuit to recover their attorneys’ fees from the loser. The right to recover attorneys’ fees must arise either from the terms of a contract or be granted by statute.

For community associations, provisions of Chapter 718 for condominiums, Chapter 719 for cooperatives and Chapter 720 for homeowners’ associations, all provide that the prevailing party, in a dispute between the association and an owner, is entitled to recover their reasonable attorneys’ fees and costs. Further, most governing documents for community associations also provide that the prevailing party in a dispute between the association and an owner is entitled to recover their attorneys’ fees and costs. However, the statutes do not generally grant an association the right to recover attorneys’ fees and costs in disputes that do not involve an owner.

In your association’s dispute with its former law firm, the written contract between the parties will control whether there is a right for the winning party to recover their attorneys’ fees. In the absence of such language in the contract for services, the winning party would not have the right to recover its attorneys’ fees, and each party would bear its own legal fees.

There is also a procedure when a case is in litigation where one party can make a written offer to the other for a settlement. If the other party does not accept the settlement and does no better at trial, with some leeway for percentages, the party who offered to settle the case can recover attorneys’ fees.

With more than 40 years experience in Association Management and Property Management, Hara Management, Inc. has the expertise needed to efficiently manage your Homeowner’s or Condominium Association; or manage rental properties and apartment communities, while providing the highest level of service to Boards and Owners. Contact HMI’s General Manager Rick Michaud, or visit HMI online to learn more about their menu of services today.