Here at GRID Systems Software, we love the Community Associations Institute "Exchange" Board for the wealth of information and contacts it brings. This week, "D.C.'s Condo and HOA Lawyer" Brian R. Fellner weighed in on a salient question about how to evaluate the services provided by a professional community association debt collection firm versus a more costly law firm. His answer intrigued us!
"This is a very difficult issue to put out "objective" analysis for a few reasons:
-- No two associations are alike. So even though the lawyer may be the best or worst, the results may not necessarily reflect that due to outside factors such as amount of assessments, style of units, bankruptcy filings, deaths, foreclosures, the economy, and many other issues.
-- No two boards are alike. When an attorney is getting good/bad results, the Board may not recognize it, may not support it, or may even actively undermine it (without realizing it) and cause the results to get worse.
-- 'Objective results' can mean different things to different people. Is the attorney being judged on getting liens in place? Securing money? Avoiding write-offs? Percentage of assessments collected? Total amount (assessments + late fees + interest + legal fees) collected?
-- Past performance is not a guarantee of future results. Successfully collecting assessments for one community does not guarantee the ability to do so again; struggling to collect assessments for another community does not necessarily mean the attorney is not competent.
There are some good suggestions above. Get recommendations or suggestions from property management professionals, and look at CAI for attorneys who are active and provide resources. Then interview a few and see how the fit is - the personal relationship is very important since you will be counting on the firm you choose to act timely, represent you professionally, and guide you accurately. Focus not just on past results, but more on the process. What does this attorney propose to do? What timelines are provided/can you expect to see? Then put some benchmarks into place to guarantee that your expectations are clearly conveyed and are reasonable.
As to the issue of collection agencies v. law firms, there are pros/cons to both of these that are pretty well documented. Sometimes all you need is the less expensive, easy option to handle a few minor collection issues. Just keep in mind that collection agencies are generally constructed with the intent of collecting unsecured consumer debt; if you use one for your community association, be sure they understand the differences."
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