$88,671 Fee Award Entered Against Both Property Owners and Occupants.
Losing HOA disputes can be costly for homeowners, because Civil Code section 1354 has a mandatory fee-shifting directive in favor of a prevailing party successfully enforcing CC&Rs. It can also extend to non-owner occupants, as the litigants in the next case learned.
In Bridgeport Community Assn., Inc. v. Martin, Case No. B215166 (2d Dist., Div. 2 Mar. 4, 2010) (unpublished), both property owners and occupants lost a CC&R enforcement dispute to the HOA involving failure to obtain approvals for certain architectural modifications. The lower court awarded HOA mandatory fees of $88,671 under section 1354.
Occupants appealed, mainly arguing that fees could not be assessed against them because they were not the property owners entitled to any fees had they prevailed.
The appellate court rejected this argument in affirming the fee award against occupants. In a prior opinion, Martin v. Bridgeport Community Assn., Inc., 173 Cal.App.4th 1024, 1027-1028 (2009), HOA was found to have properly sued occupants because owners and occupants had entered into an agreement indicating occupants would deal directly with HOA regarding any property issues, with a power of attorney being executed to that effect which was accepted by HOA. That meant one clear thing: occupants were properly assessed with fees as the parties losing under section 1354. Ouch!