$51,709 in fees on $20,000 of unpaid assessments — the Court of Appeals sent it back
$51,709 in fees on $20,000 of unpaid assessments — the Court of Appeals sent it back
2026-09-10 · Kentucky · Courts
What happened. The Kentucky Court of Appeals upheld a homeowners association's continuing lien and its right to foreclose against an owner who had not paid assessments for five years — and then vacated the attorney-fee component of the $70,991 judgment and sent it back, because the circuit court had never assessed whether the fees were reasonable.1
Blair v. Sanctuary Bluff Homeowners Association, Inc. was rendered on 20 March 2026. It consolidates six appeals — Nos. 2024-CA-0650-MR, 2024-CA-0933-MR, 2024-CA-1065-MR, 2024-CA-1119-MR, 2025-CA-0003-MR and 2025-CA-0627-MR — from three Jefferson Circuit Court actions. Judge Cetrulo wrote, with Judges Combs and L. Jones. NOT TO BE PUBLISHED.
The numbers
Roughly $20,000 of unpaid assessments. Claimed attorney fees of $51,709. A total judgment of $70,991. The court noted the association's claimed fees rose by $40,133 in two months “without explanation and/or accounting,” and that the order granting them — tendered by the association's own counsel — contained no fee analysis at all.
What the court said
The line that will be quoted:
“To be clear, legal fees for pursuing the unpaid HOA debt should be legal fees for pursuing the unpaid HOA debt, not an attempt to recoup litigation fees from other claims.”
Procedurally the striking feature is that the point was not preserved. The court reached it anyway under palpable-error review, citing Key v. Mariner Finance, 617 S.W.3d 819, Superior Steel v. Ascent at Roebling's Bridge, 540 S.W.3d 770, and Flag Drilling for the proposition that a court awarding fees must determine both entitlement and reasonableness.
The association still won everything else
This is not a defeat for the association. The owner's challenges to the association's validity were rejected, her appeals were dismissed or affirmed, and the lien and foreclosure stood. Only the fee figure was vacated, and only for a reasonableness review on remand.
The underlying dispute had run to nineteen counts, more than twenty parties, six complaints, three consolidated circuit court actions and ten appellate cases — what the court itself called “a largely unproductive legal cacophony.”
The practice this decision is aimed at
Kentucky declarations almost always allow the association to recover “costs and reasonable attorneys' fees” in a collection action, and the statutory lien provisions contemplate it. The routine is familiar: counsel prepares an agreed or tendered order carrying a lump-sum fee figure, the circuit court signs it, and the number goes into the judgment and onto the lien.
Blair says a court that signs that order without analysis has committed palpable error — error serious enough to be corrected even though nobody objected. That changes the risk allocation for boards and managers in a way that is easy to miss, because the association here won and still lost the number.
The second holding is the one with teeth. Where an owner is fighting the association on several fronts at once — challenging the association's validity, suing neighbours, contesting construction next door — the association's legal spend is not all collection spend. The word “reasonable” in the declaration attaches to fees for pursuing the debt. Fees generated defending unrelated claims cannot be folded into the assessment lien and recovered from the delinquent owner.
What changes for a board and its manager
- Require segregated, itemised time for collection matters. Ask counsel to bill collection work to its own matter number from the first letter. An undifferentiated running total on a combined file is the exact record the court found unexplained.
- Do not tender a fee order without a fee analysis in it. The order the circuit court signed here came from the association's counsel and contained no reasonableness finding. Putting the analysis in the tendered order protects the judgment.
- Watch for step-changes. A $40,133 increase over two months is what drew the court's attention. A board approving fees should be able to say what happened in that period.
- Reassess proportionality early. Fees at two and a half times the debt are a business decision the board made in stages, usually without ever revisiting the whole. Set a review point — at the complaint, at summary judgment, before the sale — and put it in the minutes.
- Remember what sits ahead of you at the sale. Kentucky raised the auctioneer's fee ceiling on foreclosure sales of real property from 6% to 10% of the sale price effective 15 July 2026. A judgment inflated by fees a court may later cut, enforced through a sale that now costs more off the top, is a poor recovery plan.
The other half of the story: deferred repairs
It is worth noticing why the owner stopped paying. The dispute involved failing subdivision retaining walls. An engineering report commissioned by a prior owner had concluded the walls were not stable in the long term and would likely fail without stabilisation; the report went to the association's members, and the subdivision was subsequently sold on. The owner withheld assessments; the association sued and foreclosed.
Withholding assessments is not a remedy Kentucky law gives an owner for deferred maintenance, and it did not work here. But the sequence is a familiar one, and the lesson for a board is upstream of the courtroom: an unfunded common-element defect that members know about produces exactly this kind of litigation, and the litigation costs more than the engineering did.
A note on the record
The opinion devotes several pages to something boards will start seeing: the pro se appellant filed briefs containing AI-fabricated citations — nine in one brief, and more after the court struck it and ordered a certification about AI use. The court declined to dismiss the appeal on that basis but described the conduct as “deliberate disregard for a Court's ruling.”
For an association facing a self-represented owner, the practical point is that fabricated authority still has to be checked and answered, and that work is billable time that a court may later scrutinise under this very decision.
What to watch next
The case returns to Jefferson Circuit Court for a reasonableness determination on the fee component. That figure — how much of $51,709 survives — is the number worth knowing, and it will be set at the trial level rather than announced in a published opinion.
The decision is unpublished, so it binds nobody. Its reasoning rests on published Kentucky authority on fee awards, however, and a circuit court asked to apply that authority to an association fee order now has a roadmap.
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