Fighting HOA Lawsuits

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One thing to point out before I even begin this post: our law firm does not handle collection cases involving HOAs (or any other kinds of collection cases – just serious personal injury claim). The purpose of the Maryland Lawyer Blog is to allow me to muse on topics outside of Maryland personal injury cases. So I feel compelled to put in this caveat so that we get calls on a collections issue. (Honestly, I don’t know anyone who defends HOA collection cases.)

Anyway, with that unnecessarily long prelude, a Maryland homeowners’ association in Prince George’s County is suing P.G. County Executive Jack Johnson for failure to pay his homeowner’s association dues. In an article I read on this case a few minutes ago, his lawyer defending the case is quoted as saying: “It’s a racket. There is no oversight or regulation.”

Exactly. It is absolutely ridiculous how these HOAs run amok, going after essentially their own clients. I fully support requiring people to pay their bills and charging them a penalty in the process for not paying their debt. I recently handled one of these types of cases for an employee who made an honest mistake, thinking she had prepaid for the year. It is absolute torture dealing with these HOAs that have the agreements with homeowners so rigged that they can extort ridiculous fees that are so out-of-line with the crime of missing a few payments. I also think many deliberately avoid advising the homeowner of the debt so that the penalties accumulate.

Then there is dealing with the HOA collection lawyer, which is an ordeal. In our employee’s case, the guy was impossible to get on the phone. Most HOA collection lawyers are essentially running a factory. Get a live person on the phone? It virtually takes an act of Congress.

These HOA documents are the ultimate adhesion contracts: if you are buying a house, you would confess to the murder in the HOA language before you would let it hold up the purchase of the home. Something should be done to put tighter screws to these HOAs. How about just a clause that says that the HOA agrees that the penalties should be reasonable and in line with what the finder of fact believes is the true cost of the debt collection?