Q&A: Hiring a Lawyer in the Matter of Arrears

Q&A: Hiring a Lawyer in the Matter of Arrears

Q. Is it typical for an association to hire an attorney on a contingency basis in order to start the process of attempting to collect arrears? Our management company went forward with this action without an official board vote.  In one instance, the first step of simply sending a letter resulted in a full $14K payment of arrears, 30 percent of which we now have to give the attorney.  It seems just the cost of writing the letter should have been all the money we needed to spend to get the same results.

                                     — What's Fair?

A. “The answer is no,” says attorney Elysa D. Bergenfeld of the Princeton-based law firm of Ansell Grimm & Aaron. P.C. “There could be management contracts in place that allow for such actions. Generally, though, a board vote is required for such actions. This situation is an example of why contingency collections are not a good idea.”  

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