Common interest community associations within Pennsylvania and New Jersey are creatures of both real estate law and state statutes. A condominium’s enforcement authority is rooted in restrictions that both run with the land and are recorded as restrictive covenants with the deed clerk of the county where the condominium is located. The major respective statutes are the Pennsylvania Uniform Condominium Act and the New Jersey Condominium Act.
Both state statutes provide that a condominium association is entitled to recover its reasonable attorneys’ fees along with the costs of suit incurred as a result of the condominium having to litigate matters relating to the collection of common assessments including unpaid monthly maintenance fees, special assessments, and other accrued condo fees. [N.J.S.A. 46:8B-21 and 68 Pa. C.S.3315(f)]. Simultaneously, the majority of condominium declarations/master deeds and bylaws allow for the recovery of reasonable attorneys’ fees and legal costs in collection actions.
In New Jersey, the Rules of Professional Conduct at 1.5(a) and New Jersey Court Rules 4:42-9 govern applications for attorney’s fees. Whereas these rules set forth eight (8) factors to be considered by the reviewing court, experience has shown that the determination of the “reasonableness” of the attorney’s fees boils down to the subjective opinion of the particular judge ruling on the fee application. Courts of both states will consider such issues as whether opposition was filed by the debtor defendant, whether court appearances were required, whether discovery was exchanged and whether any additional motions or court pleadings had to be filed outside of the ordinary.
In Pennsylvania, this subjective standard was illustrated in the case of Mountain View Condominium Association v. Bomersbach, 734 A.2d 468 (Pa.Cmwlth. 1999). In Mountain View, the Commonwealth Court of Pennsylvania ruled that the lower court did not err in its calculation and award of attorneys’ fees which the common interest community or condominium was entitled to recover from a unit owner along with unpaid condo fees. What makes Mountain View so noteworthy is that the Court allowed a fee award of $46,548.64 on what was initially only a debt of $1,200.00 when the condominium initiated the law suit.
Whereas the fee rates which condominiums agree to pay their attorneys may be the same or similar to their competitors’ within the industry, the court’s awarding of these fees through the foreclosure process is dependent upon the court’s subjective opinion. Some courts rightfully award a condominium all legal fees and costs incurred in a foreclosure action, penny for penny, whereas in some situations some specific judges dramatically reduce the amount of the attorney fee award.
When a judge issues an order awarding attorneys fees and legal costs less than the amount which the condominium incurred, the condominium may file a motion seeking the court to reconsider its position on the award, or the condominium can appeal the court’s decision to the proper appellate court. However, both of these options will cause the condominium to incur additional legal fees which may not be recoverable from the debtor. The decision as to whether the condominium should file a motion for reconsideration or appeal the court’s decision after the entry of final judgment should be made on a case-by-case basis depending upon the total amount which the court has reduced the fees awarded, and the time-frame in which the condominium finds itself in regards to moving forward with the foreclosure action.
As stated by the trial court in Mountain View, “[t]he Association had the option of either backing off or enforcing its rights under the Declaration and the decisional law. The fact that it elected not to compromise, to stand on principal and to uphold the law requires that its attorney’s fees be covered. Any holding to the contrary would cause chaos in Condominium Associations whose compliant members would have to bear the cost of dealing with non-compliant members.” In the end, there is no sure-fire way to predict the amount of attorney’s fees which will be awarded by a court. However, this should never deter a common interest community from enforcing its declaration/master deed and bylaws to collect unpaid condo fees and assessments, the “life-blood” of the condominium.