Our Clients Ask Us:back-billing Legal Fees For Collection

Q:

We have several collection matters pending at the moment. I understand that we can bill back the delinquent owner for any costs of collection, including attorney fees, paralegal fees, and court costs. When we receive a bill from your firm, should we add in those fees to the delinquent owner’s account?

A: YES. Add those attorney fees, paralegal fees and court costs directly to the owner’s account. Not only will this provide the owner with an accurate depiction of what he/she truly owes the Association, but especially if we are handling court actions for your Association, we need to have an accurate total in order to get a judgment for the full amount of the attorney fees. Also, when we prepare a lien, send a demand letter, or file an action in court, we need to know the full amount owed. Failing to include attorney fees on accounts can result in loss for the Association, especially if a delinquent member files for bankruptcy. Also, keep in mind that Courts require an itemization of attorney fees. For example, if you receive a legal bill for $200.00, do not just add $200.00 into a “legal fee total” at the bottom of the statement. If $150.00 was billed for preparing a lien, state on the bill “Legal Fee: Prepare Certificate of Lien” and $50.00 was billed for responding to a dispute, state on the bill “Legal Fee: Respond to Owners Dispute”. Precise record keeping will make accounts more accurate and will prevent unnecessary work in the future.

More on Community Associations