SB 100 - Restrictions on Automatic Collection of Attorneys Fees

Now that SB 100 has been law for a month, we, and you, are able to start comprehending its many changes to the way community associations have historically done business. For the full text of the law as approved by Governor Owens, click here. One of the most significant changes has to do with the collection of attorneys fees from members that violate the association's governing documents.

While the association may require reimbursement of collection costs and reasonable attorneys fees incurred as a result of an owner's failure to timely pay assessments, even without the necessity of commencing a legal proceeding, that is no longer the case for other legal proceedings to enforce the provisions of the governing documents. In such a case, the association may seek reimbursement of attorneys fees. The court is mandated to award collection costs and reasonable attorneys fees to the prevailing party in such claim. If the owner prevails in the action because the court determines that the owner did not commit the violation, then the court must award reasonable attorneys fees to the owner, and may not award attorneys fees to the association, and the association is precluded from allocating to the owner's account any of the association's costs or attorneys fees incurred in asserting or defending the claim.

The net effect of this provision on the association, and its managers, is that the association may no longer automatically include attorneys fees incurred by the association on the owner's account or ledger of amounts owed, if the fees were incurred in any legal matter other than the collection of assessments. In other words, collection costs and attorneys fees incurred in non-assessment collection matters may only be added onto the account and ledger once the court has actually awarded them to the association.

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