I'll do some research into the topic of notifying members about lawsuits. Based on the discussion at the monthly meeting, it sounds like there was a consensus that members would like to be notified when a lawsuit is filed.
Article 1: Duty to Read CC&Rs
2025 CC&Rs (Page 2):
Each Member shall be deemed to have read and accepted the terms of the CC&Rs, and each Member shall be responsible for complying with all the terms and conditions of the CC&Rs. No Member shall be entitled to claim ignorance of any provision of the CC&Rs as a defense to any enforcement of the CC&Rs or action brought or penalty levied by the Association against the Member.
Status: Entirely new provision
Concern: CC&Rs are already binding, and this language may give the HOA disproportionate enforcement power without addressing fairness concerns.
I'm trying to understand these last two sentences. Why are they here? What do they mean? 1.1.15. “Attorney’s Fees” shall mean the legal fees incurred by the Association in any legal action or proceeding, whether in or out of court, before or after a hearing or judgment, to enforce or defend any provision of the Governing Documents. The Association shall not divide Attorney’s Fees between it and its attorney. All Attorney’s Fees shall be retained by the Association’s attorney.
ChatGPT said:
The last two sentences of Section 1.1.15 (Attorney’s Fees) mean the following:
"The Association shall not divide Attorney’s Fees between it and its attorney."
This seems to clarify that the HOA itself cannot claim a portion of the attorney’s fees. Normally, legal fees go directly to the attorney, so this statement may be redundant. However, it could be trying to prevent the HOA from collecting extra money by charging legal fees beyond what the attorney actually bills.
"All Attorney’s Fees shall be retained by the Association’s attorney."
This reinforces that any attorney’s fees collected by the HOA must go directly to the attorney and not be kept by the HOA for other uses.
This language could be aimed at preventing the HOA from using legal fees as a revenue source.
It ensures that if legal fees are assessed against a homeowner, they are strictly for covering the attorney’s costs and not extra HOA charges.
Is this necessary? Normally, attorney’s fees are paid directly to the attorney through invoices, so specifying this might be unnecessary.
Could this limit flexibility? If the HOA reaches a settlement where only part of the legal fees are recovered, would this language prevent them from handling that in a practical way?
It might be worth asking why this was included—was there a past issue with how attorney’s fees were handled?
Example Scenario: HOA vs. Homeowner Legal Dispute
Situation:
A homeowner violates the CC&Rs by making unapproved exterior modifications. The HOA sends violation notices, but the homeowner refuses to comply. The HOA then takes legal action, hiring an attorney and accruing $10,000 in legal fees.
Settlement Negotiation:
Before going to court, the homeowner and HOA reach a settlement. The homeowner agrees to undo the modifications and pay $5,000 in attorney’s fees as part of the settlement.
Potential Problem with This CC&R Language:
Normally, the HOA might absorb the remaining $5,000 as a cost of settlement, considering it a compromise to avoid further litigation.
However, the language in 1.1.15 states that "all Attorney’s Fees shall be retained by the Association’s attorney."
This could be interpreted to mean that the attorney must receive the full $10,000, even though only $5,000 was recovered in the settlement.
The HOA might then be unable to negotiate partial reimbursement and instead be forced to take the homeowner to court for the remaining $5,000—potentially incurring even more legal costs.
Why This Matters:
It removes the HOA’s ability to settle disputes efficiently by negotiating partial recovery of legal fees.
It could force unnecessary litigation, driving up costs for both the HOA and homeowners.
It could discourage settlements, making legal disputes harder to resolve without going to court.
If the goal is to prevent the HOA from profiting off legal fees while allowing for practical settlements, a better approach might be:
“Attorney’s Fees shall be retained by the Association’s attorney, except in cases where the Association, in its discretion, deems it in the best interest of the community to negotiate a partial recovery of fees in a settlement.”
This would allow settlement flexibility while ensuring the HOA isn’t collecting legal fees as a revenue stream.
Minimum Participation. We need to check State Laws likely outlined in
Eminent Domain of a common area. Needs to stay with the higher state standard of 67% of membership vote rather than a majority of whomever shows up in a member meeting. (We need to act in the interest of all members)
Status:
Concern: Last Bullet
Expanded board power to decide what utilities they are going to run, regardless of member wants or being forced by the State or Sanpete County.
Who is administrative? Is it the SMR BOD Board of Directors? Define who is administrative decision ref to or an administrative decision? This power is too broad of a power to give a board. If it is the county fine but we need this clarified.