How Condo & HOA Boards Can Reduce Legal Fees Without Increasing Risk

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The Most Effective Way to Reduce Legal Fees Is to Eliminate Unnecessary Legal Work

Boards can often do that by:

The goal should not be to minimize every legal bill. It should aim to avoid unnecessary legal expenses while protecting the association and maximizing the value of the legal fees spent.

Information vs. Advice

Do Not Use AI, Google, or a Community Association Manager as a Substitute for Legal Advice

Community association boards have more sources of information than ever. Artificial intelligence tools, Google searches, community association managers, and other board members can all be useful for general information. But they are not substitutes for legal advice on higher-risk issues.

AI and online research may not account for a condominium or homeowners association’s actual governing documents, municipal requirements, applicable state law, federal law, or the specific facts involved, and it may not even know the correct questions to ask to provide an accurate answer. Similarly, many free AI tools will hallucinate and provide inaccurate information. In most cases, using these tools to create draft policies, letters, or amendments to governing documents typically requires more time for an attorney to fix than starting from scratch.

Community association managers can also be highly knowledgeable about association operations, but their role is different from that of a community association attorney. Legal questions involving Fair Housing, governing document interpretation, enforcement authority, contracts, collections, fiduciary duties, or potential litigation should be directed to a community association attorney. Trying to save on legal fees by relying on a non-attorney source can often create a much larger expense if the board later has to correct the decision.

Choosing Counsel

Does Hiring a Cheaper Attorney Actually Save an HOA Money?

Not necessarily. A general practitioner, real estate attorney, or the lawyer with the lowest hourly rate may charge less, but a community association can spend more if the attorney needs additional time to learn an unfamiliar area or if another lawyer later has to correct the work. Community association law often involves corporate governance, restrictive covenants, Fair Housing, collections, contracts, real estate law, and litigation at the same time.

The greater cost can arise when the work must be done twice. Community associations sometimes hire Hirzel Law to correct governing document amendments, enforcement procedures, or other legal work that was not completed properly the first time. The condominium or homeowners association then pays once for the original work and again to fix it.

Boards should compare experience, efficiency, responsiveness, quality, and total expected cost, rather than hourly rate alone. As in any industry, the market dictates rates, and there is typically a reason some firms charge differently from others. If you are looking for a good benchmark, there are industry publications from the state bar that provide typical hourly rate ranges based on experience, practice area, and geographic location, a good resource for boards evaluating rates. When the issue carries significant legal or financial risk, boards should consider how often the attorney handles such community association matters, not just the hourly rate.

For a more detailed discussion, see How to Choose a Condo or HOA Law Firm.

Pricing Models

Should a Condo or HOA Use a Monthly Legal Retainer?

Sometimes, but boards should understand the tradeoffs. A monthly retainer can provide predictable legal expenses and may work well for a community association that consistently incurs significant routine legal time. But a retainer can also result in a community association paying for legal services it does not use. If the community association budgets more for legal expenses and does not spend the money, the association keeps it rather than paying it to the law firm. In many cases, it is to the association’s benefit to increase the legal budget and keep the budgeted funds if they are not actually spent.

Boards should also consider the incentives created by a fixed monthly fee. If additional attorney time does not generate additional compensation, there could be less financial incentive to respond promptly, ask follow-up questions, review governing documents, research case law, or conduct a deeper analysis of complicated issues.

That does not mean retainer arrangements are inherently bad. It means boards should understand exactly what is included, what is excluded, how responsiveness is handled, and whether the arrangement encourages the level of analysis the board expects. Some fee agreements offer a reduced hourly rate on retainer, but increase the rate if the community association leaves, so boards should be wary of long-term commitments or exit penalties.

Planning

Your HOA Should Budget for Legal Fees Before They Are Needed

When creating a budget, most associations don’t account for Murphy’s Law in legal matters: “Anything that can go wrong, will go wrong.” As a result, many community associations budget very little for legal expenses unless they are already involved in litigation. That is usually unrealistic. Even well-run community associations routinely encounter legal issues involving collections, bylaw enforcement, Fair Housing claims, contract review, board meetings, governing document interpretation, document amendments, and changes in the law.

A realistic legal budget allows the board to seek advice when needed, rather than delaying due to an unanticipated expense. If a community association does not use the money, it can generally remain available for other association purposes. Better yet, ask the attorney for input when preparing the budget, they can advise on what the association has historically spent or should reasonably anticipate for issues such as collections, bylaw violations, or requests for legal opinions. And if you have owners threatening litigation, a major dispute with a contractor, or a problem with the developer, account for it when creating the budget.

Prevention

Create Procedures for Recurring HOA Legal Issues

HOA boards can incur unnecessary legal fees when they repeatedly ask the same questions because the association lacks an established procedure. Collections are a common example: instead of deciding how to handle each delinquent owner from scratch, the association can adopt a written collection policy that establishes when to send reminder letters, when to turn accounts over to counsel, and when to consider additional remedies. A consistent collection procedure also helps prevent small delinquencies from sitting unresolved for months.

Community associations can also incur unnecessary legal expenses by charging owners fees that are not permitted by the governing documents or applicable law, billing owners for expenses without confirming the association’s authority, or imposing fines without following the required procedure. These problems often arise when a board or management company follows standard practice without first checking the association’s governing documents, and the association may later spend legal fees defending, reversing, or correcting a charge that should have been handled differently from the beginning.

The same principle applies to bylaw enforcement, architectural requests, owner complaints, and meeting procedures. Good procedures reduce repeated board debates and repeated legal questions, and the longer a bylaw enforcement problem remains unaddressed, the fewer inexpensive options may remain. Being proactive is an area most community associations overlook, but where a small amount of preventative legal advice can save substantially more legal fees later.

Judgment Calls

Know When to Call an HOA Attorney and When Not To

Not every community association problem requires legal counsel. Some issues are operational, managerial, or interpersonal, and in many cases, good communication and transparency from the board or the community association manager can avoid the need to involve the HOA’s attorney. Other matters should involve a community association attorney early, because the potential consequences of getting them wrong are much greater.

Efficiency

Communicate Efficiently with Your Community Association Attorney

While most law firms, including Hirzel Law, will communicate with a board in the manner it prefers, legal fees can often be reduced by using one board member or a community association manager as the primary legal liaison. Without a single point of contact, an attorney may receive separate emails from several directors and the manager about the same issue, sometimes with conflicting instructions or overlapping questions that require multiple responses.

A more efficient approach is for the board to discuss nonlegal issues internally, determine what legal question needs to be answered, and have one person communicate that question to counsel. It’s perfectly fine for the response to go to all board members, so they are informed. Boards should also avoid copying the attorney on every internal board or management email, which can increase unnecessary attorney review time.

Transparency

Ask Your HOA Attorney for an Estimate and Be Clear About the Budget

Community association boards should feel comfortable asking what a significant legal project is expected to cost. Useful questions include:

Condominium and HOA boards should also be candid when funds are limited. For example:

A good community association attorney should be able to explain what can be accomplished within the available budget and what additional work may be necessary. The board should also ask whether the right person is performing the work, collections, general counsel matters, document amendments, contracts, and litigation require different skills and may justify different staffing and billing rates.

Prevention

Review and Update Governing Documents Before Problems Arise

Outdated or poorly drafted governing documents can create unnecessary legal expense for community associations. Boards should periodically review whether the governing documents clearly address issues such as:

Boards often assume the association can automatically recover attorney fees or charge certain expenses back to an owner. That may depend on applicable law and the specific language of the governing documents. Clarifying these issues before a dispute arises is generally less expensive than litigating over ambiguous or outdated documents later.

Before You Sign

Review Significant Contracts Before Signing Them

It is almost always easier and less expensive to negotiate a contract before a community association signs it. After a dispute develops, the attorney is limited by the language the board has already accepted. Major contracts can involve significant issues such as:

The cost of reviewing an important management, construction, roofing, landscaping, telecommunications, or other significant contract before execution is generally much easier to control than the cost of litigating unfavorable or ambiguous terms afterward.

Free Resources

Take Advantage of Free Educational Resources

One of the simplest ways to reduce legal expenses is to become a better-informed board. Most community association law firms provide seminars, webinars, newsletters, and legal updates through newsletters or blogs. These materials do not replace legal advice for a specific issue, but they can help boards recognize problems earlier, understand when counsel should be involved, and avoid preventable mistakes.

The Hirzel Law Answer

Hirzel Law provides educational resources for condominium and HOA board members and property managers, including Hirzel’s Handbook: How to Operate a Michigan Condo or HOA, Hirzel’s Handbook: How to Operate an Illinois Condo or HOA, legal blogs and updates, educational seminars and webinars, and other community association resources.

Frequently Asked Questions

Reducing HOA Legal Fees: FAQs