What you need to know:

1. Past practice likely won’t be sufficient to sustain a manager’s assessment to a lot owner.
2. If your association documents set forth a process by which something must be done (e.g. assessments) FOLLOW IT. 

Issues:

1. What is the proper way for an association to assess an owner for attorney fees?
2. Can the association use its past practice of allowing the manager to make the assessment against the owner? 

Facts: An owner had a mortgage foreclosure action filed against it. The HOA incurred $475.50 in attorney fees for filing an answer. The HOA attorneys invoiced the HOA the $475.50 and the manager added the charge to the owner’s ledger. The debt then rose when the association began its efforts to collect on the debt, such that a delinquent assessment letter was sent about 4 months later for $1,698.45. 

Trial Court: Six months later the HOA filed a complaint for lien foreclosure. The owner denied that “any authorized assessments were made against the [owner’s] property.” On cross motions for summary judgment, the trial court determined that the association incurred the attorney fees of $475.00, which constituted a loss to the association, and implicitly found that the assessment was properly placed on the owners ledger. 

Appeals Court: The owner appealed arguing that the HOA “never produced any evidence that the Board of Directors actually levied an individual assessment against her property.” The HOA argues that the HOA documents give it the right to levy the assessment, but the “HOA spends little time refuting [the owner’s] argument that the Board … failed to actually levy an assessment.” The HOA also failed to point to anything in the HOA documents that would let anyone other than the Board levy an assessment. The appeals court then reversed the trial court and ordered that summary judgment be granted to the unit owner. 

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