{"id":84,"date":"2026-09-03T04:21:07","date_gmt":"2026-09-03T04:21:07","guid":{"rendered":"https:\/\/fightmytxhoa.com\/home\/?p=84"},"modified":"2026-09-03T04:29:09","modified_gmt":"2026-09-03T04:29:09","slug":"part-eight-the-450-fill-in-the-blank","status":"publish","type":"post","link":"https:\/\/fightmytxhoa.com\/home\/part-eight-the-450-fill-in-the-blank\/","title":{"rendered":"The 450 Fill-In-The-Blank: When An HOA Collection Agency Charges Top Dollar For Clerical Work — And Gets Paid Twice"},"content":{"rendered":"\n\n
\n Part Eight of the HOA Foreclosure Series<\/strong> \u00b7 The previous parts documented defective processes and inflated charges. This part is about the bill \u2014 and the sworn affidavit that supports it. The collection agent claimed $450\/hour for “original research” when the work was largely clerical. And if the agent worked on contingency, the homeowner isn’t liable for those fees at all. Series index<\/a>\n<\/div>\n\n
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The Eighth Problem<\/h2>\n\n

The previous parts of this series told the story of a Texas homeowner whose house was sold at HOA foreclosure through a chain of statutory defects: unclaimed certified mail and a process server who knew the house was displaced (Part One); a defective \u00a7 209.0064 collection notice (Part Two); unsecured debt quietly converted into a secured claim (Part Three); a board vote on a vague agenda (Part Four); a $200\/day fine resurrected from a 2022 notice (Part Five); CARES Act pandemic-relief money paid to the HOA followed by same-day notices and an intent-to-sue (Part Six); and a phantom 2015 amendment vote that authorized the inflated dues in the first place (Part Seven).<\/p>\n\n

This part is about the bill. Specifically, about the line items that turned a default judgment into a foreclosure-sized amount \u2014 and about an affidavit the collection agency filed in support of it.<\/p>\n\n

The collection agency that helped secure the default judgment submitted an affidavit swearing that its work constituted “original work that required research,” performed at $450 per hour. In fact, by the homeowner’s account, the work was largely clerical: filling in the blanks on form filings, processing notices, and forwarding paperwork. Routine ministerial work that should not have been billed at attorney rates \u2014 and that should not have been billed at all if the collection agent was operating on contingency, as many do.<\/p>\n\n

The agency also claimed post-judgment “necessary collection charges” that, by the homeowner’s account, were inflated beyond what was actually incurred. Each of those numbers went into the judgment. Each of those numbers is now part of what the homeowner has to repay, redeem against, or challenge.<\/p>\n\n

This is the eighth problem in the chain \u2014 and it may be the one that is easiest to attack on a strict dollar-for-dollar basis.<\/p>\n\n

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What an HOA Is Allowed to Charge the Owner<\/h2>\n\n

Texas law gives HOAs a real collection power, but it draws sharp limits around the fees they can recover. Three rules are critical:<\/p>\n\n

1. Reasonable attorney’s fees and costs only (Tex. Prop. Code \u00a7 209.008(b))<\/h3>\n\n
A property owners’ association may recover… reasonable attorney’s fees and other reasonable costs incurred by the association…<\/blockquote>\n\n

Two words do most of the work: “reasonable.” Fees that are inflated, unnecessary, performed at the wrong rate, or duplicative are not recoverable from the owner.<\/p>\n\n

2. Collection-agent fees cannot be charged to the owner if the agent is on contingency (Tex. Prop. Code \u00a7 209.0064(c))<\/h3>\n\n
An owner is not liable for fees of a collection agent retained by the property owners’ association if: (1) the obligation for payment by the association to the association’s collection agent for fees or costs associated with a collection action is in any way dependent or contingent on amounts recovered; or (2) the payment agreement between the association and the association’s collection agent does not require payment by the association of all fees to a collection agent for the action undertaken by the collection agent.<\/blockquote>\n\n

This is the rule most homeowners do not know about \u2014 and it can be devastating to an HOA’s claimed fees. If the collection agency’s fee is contingent on what it collects (the typical debt-collection arrangement), the owner is not liable<\/strong> for any of those fees. Period. The HOA cannot pass them through. They cannot be added to the lien. They cannot be part of the foreclosure amount.<\/p>\n\n

3. The HOA must have a written collection policy (Tex. Prop. Code \u00a7 209.0061)<\/h3>\n\n
A property owners’ association shall adopt reasonable written policies to…<\/blockquote>\n\n

The association must have a written policy on collection practices. Fees charged outside that policy \u2014 or contrary to its terms \u2014 are suspect.<\/p>\n\n

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The Contingency-Fee Bar: The Largest Single Win<\/h2>\n\n

This deserves its own treatment, because it can wipe out the entire collection-fee portion of a foreclosure amount.<\/p>\n\n

Industry practice.<\/strong> Debt collection by HOAs is almost universally done through third-party collection agencies, not directly by HOA attorneys. Those agencies typically operate on contingency: they take 25-50% of whatever they collect from the homeowner. The HOA pays nothing upfront; the agent gets paid only if it recovers.<\/p>\n\n

What \u00a7 209.0064(c) says.<\/strong> In that contingency arrangement, the homeowner is not liable for the collection agent’s fees. The statute does not require the homeowner to pay the percentage. The HOA cannot pass it through.<\/p>\n\n

Why this rule exists.<\/strong> Contingency-fee arrangements create an obvious conflict of interest. An agent paid by percentage of recovery is incentivized to inflate the amount collected, prolong the collection, and resolve in a way that maximizes its cut \u2014 not in a way that minimizes the homeowner’s debt. The Legislature’s solution was to make those fees the HOA’s problem, not the homeowner’s. If the HOA wants to use a contingency collector, the HOA pays the contingency. If the HOA wants to recover fees from the homeowner, the HOA must use a non-contingency arrangement that pays the agent regardless of recovery \u2014 at which point the fees are arguably more reasonable because they are not driven by recovery pressure.<\/p>\n\n

What it means in this case.<\/strong> If the collection agency working this matter was on contingency (or had a hybrid arrangement where part of its fee was contingent), the entire collection-fee component of the judgment is non-chargeable to the homeowner.<\/strong> That could eliminate a substantial portion of the foreclosure amount.<\/p>\n\n

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The $450-an-Hour Problem<\/h2>\n\n

Even when fees are not on contingency, they still must be reasonable \u2014 both in rate and in hours. Several problems are visible in this case.<\/p>\n\n

Rate reasonableness.<\/strong> $450 an hour is at the top end of attorney rates, even in major metropolitan markets. Texas courts applying the “lodestar” method (reasonable rate \u00d7 reasonable hours) look at what comparable attorneys in the same area charge for similar work. Collection work \u2014 particularly the clerical, form-driven work this case allegedly involved \u2014 is typically billed at significantly lower rates. A $450 hourly rate for filling in the blanks on a form filing is not a “reasonable rate” for that work.<\/p>\n\n

Hours reasonableness.<\/strong> “Reasonable hours” means hours that were actually worked, on tasks that were actually necessary. If the bulk of the work was clerical and ministerial \u2014 printing forms, filling in addresses, processing routine filings \u2014 it should not have been charged at attorney rates at all. Many such tasks are properly billed at paralegal rates (often $100-150\/hour), and some are properly billed as overhead, not as billable time. An affidavit that claims “original research” for clerical form-filing is a candidate for fee reduction.<\/p>\n\n

Necessity reasonableness.<\/strong> Even at $450 an hour, fees are only recoverable if the work was necessary.<\/em> Charging for “research” that never happened, “calls” that were never made, or “review” of documents that did not require review, is not recoverable. Fees must reflect work that was actually performed, on tasks that actually needed doing.<\/p>\n\n

Duplicate work.<\/strong> If two people at the collection agency each billed time on the same task, only one of them can recover fees for it. Itemized billing that does not distinguish who did what \u2014 or that double-counts the same task \u2014 is a candidate for adjustment.<\/p>\n\n

When an affidavit claims “original work” at premium rates for clerical tasks, that is not just an ethical problem \u2014 it is also a fee reasonableness problem. The amount claimed can be reduced by the court on motion.<\/p>\n\n

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The Affidavit Problem<\/h2>\n\n

The collection agency’s affidavit described its work as “original” and “requiring research.” If the actual work was filling in the blanks on form filings \u2014 work that requires no research and is not “original” \u2014 then the affidavit contains statements that are at least misleading and may be knowingly false.<\/p>\n\n

A sworn affidavit containing materially false statements has several possible consequences:<\/p>\n\n

    \n
  1. Perjury.<\/strong> Texas Penal Code \u00a7 37.02 makes it a crime to make a false statement under oath. An affidavit filed in support of a judgment that contains materially false statements about the work performed \u2014 if knowingly false \u2014 can support a perjury prosecution. This is not the homeowner’s primary remedy, but it can be raised with the court or the local prosecutor if the facts support it.<\/li>\n
  2. Fraud on the court.<\/strong> A judgment obtained through a sworn affidavit containing materially false statements can be challenged as procured by fraud. The Texas Supreme Court has long recognized that extrinsic fraud \u2014 fraud that prevents a party from presenting their case \u2014 can support setting aside a judgment.<\/li>\n
  3. Vacating the judgment.<\/strong> A judgment supported by a false affidavit of fees can be a candidate for a bill of review or a motion to vacate. The homeowner’s exposure depends on what the affidavit was used for: if it was the only<\/em> support for the fee component of the judgment, the entire fee award can be challenged.<\/li>\n
  4. Disciplinary exposure.<\/strong> If the affidavit was signed by a Texas-licensed attorney, false statements in support of fee awards are a disciplinary matter. The State Bar of Texas has authority to investigate and sanction attorneys who make unsupported or misleading representations in court filings.<\/li>\n<\/ol>\n\n
    \n\n

    Why This Matters for the Foreclosure Amount<\/h2>\n\n

    Every fee that was inflated \u2014 or that should never have been charged at all under the contingency-fee bar \u2014 went into the judgment. Every dollar in that judgment is a dollar that the lien secured. Every dollar the lien secured is a dollar the foreclosure was supposed to recover.<\/p>\n\n

    If the contingency bar eliminates $5,000 in collection fees, the judgment (and the lien, and the foreclosure amount) should have been $5,000 lower. If the reasonableness requirement reduces $10,000 of attorney time to $3,000, the same is true. The cumulative effect can be substantial \u2014 particularly when the HOA’s collection agent was paid on contingency and the entire fee component is barred.<\/p>\n\n

    A homeowner fighting the foreclosure has multiple tools here:<\/p>\n\n