In most litigation cases, you can’t get your attorneys fees back. But HOA litigation is different. The California legislature recognized that if attorneys’ fees weren’t available, CC&Rs would be largely unenforceable. Litigation is expensive. Often, the cost of litigation is so prohibitive that HOAs would run roughshod over homeowners, secure in the knowledge that it would be just too expensive to fight back or that the cost of fighting back would dwarf the benefit of winning.
There are two ways to get attorneys fees in HOA litigation, even if the dispute does not involve the HOA itself. First, attorneys’ fees are available to a prevailing party under California Civil Code section 5975. Second, attorneys’ fees are available if the CC&Rs specify that attorneys’ fees are available.
Civil Code section 5975 allows a homeowner to sue their HOA or another homeowner to enforce the CC&Rs or any other “governing document.” That includes bylaws and rules and regulations, articles of incorporation, and articles of association. In addition to allowing suit, section 5975 subdivision (c) states that “[i]n an action to enforce the governing documents, the prevailing party shall be awarded reasonable attorney’s fees and costs.”
Although section 5975 does not define what “prevailing party” means, California Courts interpret it to mean the party that got what they wanted from the litigation “on a practical level.” (See Almanor Lakeside Villas Owners Assn. v. Carson (2016) 246 Cal.App.4th 761, 773; and Las Palmas Homeowners Assn. v. Terifaj (2004) 33 Cal.4th 73, 94.)
As an alternative and independent basis for attorneys’ fees, homeowners may also be entitled to attorneys’ fees under the language of the CC&Rs. While not all CC&Rs contain language granting attorneys’ fees, most modern CC&Rs do.
Some CC&Rs grant attorneys’ fees only in favor of the HOA in an attempt to grant one-way attorneys’ fees. But California law fixes that too. Civil Code section 1717 makes any contractual provision for attorneys’ fees reciprocal. Although, on its face, section 1717 only applies to lawsuits regarding contracts, California Courts interpret CC&Rs as contracts and are therefore subject to section 1717.
Although a homeowner can get attorneys’ fees under either section 5975 or a specific provision of the CC&Rs (or both), there’s a catch. It goes both ways. If a homeowner sues the HOA and the HOA wins, the losing homeowner will owe the HOA its attorneys’ fees. In some instances, the homeowner will owe the HOA money even if the homeowner voluntarily dismisses the lawsuit. (See, e.g., Parrott v. Mooring Townhomes Assn., Inc. (2003) 112 Cal.App.4th 873; and Salehi v. Surfside III Condominium Owners Association (2011) 200 Cal.App.4th 1146, 1155.)
Because of the risk associated with filing a lawsuit and either losing or voluntarily dismissing it, it’s important that homeowners seek legal advice from experienced attorneys who are familiar with HOA law before making the decision to initiate litigation.