Recovering Attorneys’ Fees from Unit Owners
When a unit owner becomes delinquent or violates the association’s declaration of covenants and restrictions, who is responsible for paying the attorneys’ fees and other costs associated with recovering the delinquent assessments or remedying the violation? Generally, the “American rule” of law is that each party is responsible for paying its own attorneys’ fees. In other words, the responsible, rule-abiding owners must pay for an attorney hired by the association to enforce the rules. Shouldn’t it be the other way around? Doesn’t it make more sense that the owner who violated the rules or failed to pay his assessments should be the one to pay?
Fortunately, in Ohio, the law supports an association’s assessment of legal costs against a violating owner in both the condominium and HOA setting. Ohio Revised Code Section 5312.11 permits a HOA to assess an individual lot for “[c]osts associated with the enforcement of the declaration or the rules and regulations of the owners association, including, but not limited to, attorney’s fees, court costs, and other expenses.” These fees and costs can be secured by a lien against the owner’s lot pursuant to Revised Code Section 5312.12.
In a condominium, Ohio Revised Code Section 5311.18 authorizes a condominium association to file a lien against an owner’s unit for unpaid expenses, including “[i]nterest, administrative late fees, enforcement assessments, and collection costs, attorney’s fees, and paralegal fees the association incurs if authorized by the declaration, the bylaws, or the rules of the unit owners association and if chargeable against the unit.” Note that in a condominium the attorneys’ fees and other legal costs must be “authorized” by the association’s governing documents. If a condominium association’s documents do not expressly authorize the collection of attorneys’ fees and legal costs, the board should consider an amendment to the declaration or rules to allow the recovery of these costs.