Owners’ fee award against HOA may prompt more suits

A new attorney’s fees opinion by a Fairfax judge could fuel litigation against community associations, lawyers say.

Homeowners are entitled to recover attorney’s fees if they prevail in a suit under the Virginia Property Owners’ Association Act, the judge decided in an Aug. 24 letter opinion.

It’s a clear ruling in a murky area that strengthens an owner’s bargaining position, a lawyer for the plaintiff homeowners said.

The case is Farran v. Olde Belhaven Towne Owners’ Association (VLW 011-8-162). It was decided by Fairfax County Circuit Judge Lorraine Nordlund.

The homeowners’ lawyer, Scott Surovell of Fairfax, said there has been a “brewing controversy” in Northern Virginia HOA cases about whether homeowners could get attorney’s fees.

“This opinion nails that coffin shut,” he said.

Surovell’s clients, Samir and Maria Farran, have been locked in a two-year battle with the HOA at their Alexandria townhouse community.

In a 2009 lawsuit, the couple challenged the right of the HOA to levy fines on nonconforming homeowners. “They didn’t want to be in a place where they could be fined for having dead flowers in a flower box,” Surovell said.

The Farrans also sought to overturn denial of their request to build a deck on the back of their townhouse.

In a 2010 decision, a judge decided in favor of the Farrans on the issue of fines and ordered the HOA to pay $41,300 in attorney’s fees. The court upheld the right of the HOA board of directors to bar the deck, however.

In a new lawsuit, the Farrans claimed mismanagement by the HOA. Among other claims, the couple accused the HOA of raiding its financial reserves to pay more than $130,000 in legal fees from the prior lawsuit. The couple also asked for an order to allow the Farrans to build their proposed deck.

In a letter opinion denying the HOA’s demurrer, Nordlund sought to clarify the attorney fee issue. The judge noted at a hearing that this was the second or third time the attorney fee issue had arisen in HOA cases, according to Surovell.

The HOA took the position that the fee shifting provisions of Virginia Code § 55-515(A) apply only if the HOA sues a homeowner and loses. The HOA attempted to distinguish a 2006 Virginia Supreme Court opinion suggesting otherwise. It is a position adopted by other community associations in similar disputes, Surovell said.

Nordlund found the language of the statute permitted a broader application of the fee award provision and held the Supreme Court opinion compelled such a broad interpretation.

Nordlund’s decision is powerful ammunition for homeowners, Surovell said. “Being able to recoup your fees can really change the dynamics of your position,” he said.

William W. Sleeth III of Williamsburg, whose practice includes community association work, agrees the attorney’s fees issue can be critical. “Sometimes the recovery of attorney’s fees can become one of the dominant factors driving the case from the plaintiff’s end and can occasionally dwarf the actual monetary amount at issue,” he said.

With the sour economy, homeowners have become more aggressive towards each other and towards their associations, Sleeth said. He suspects claims are up against community associations.

“This case and others like it really underscore the need for community associations to be proactive in seeking out legal advice to ensure they don’t find themselves ensnared in potentially costly litigation,” he said.

Surovell said a trial on the Farrans’ suit is scheduled for November.

The Belhaven HOA was represented by Bruce M. Blanchard of Fairfax. He did not respond to a request for comment as of press time.