A court entered a money judgment against our HOA. How does the board pay it?

By OurHOA · General information · Revised November 8, 2026

What an HOA board does after losing in court: appeal and stay deadlines, insurance, interest, garnishment risk, raising the money and clearing the judgment.

Part of the HOA board handbook: treasurer and money.

The short answer

A money judgment is a debt with interest running and a creditor who may be able to collect before your next scheduled meeting. Do five things in the first week. Calendar the judgment date, send the judgment to every insurer, ask the attorney for the last day to appeal and the first day the other side can collect, request a payoff figure, and call a closed session to decide whether to appeal or pay. This guide covers the money side after a loss. If an offer is still on the table, start with our guide on deciding whether to settle a lawsuit. Rules vary by state and by your governing documents, and this is education, not legal advice. Have your attorney confirm every date below for your court.

Find the clocks on the judgment

The date that counts is the day the judge signed or the clerk entered the judgment, not the day your attorney emailed it. In general civil courts: - Texas: notice of appeal within 30 days after the judgment is signed, or 90 days if a party timely files a motion for new trial or a motion to modify (Tex. R. App. P. 26.1). - Florida: motion for new trial or rehearing within 15 days (Fla. R. Civ. P. 1.530(b)), and notice of appeal within 30 days (Fla. R. App. P. 9.110(b)). - Colorado: post-trial motion within 14 days (C.R.C.P. 59(a)), and notice of appeal 49 days after the final judgment (C.A.R. 4(a)(1)). Small claims and county courts have their own rules, and some move much faster. Read the notice that came with the judgment and ask the attorney the same day.

An appeal alone may not stop collection

Filing a notice of appeal does not by itself protect the bank accounts in most money cases. The association usually has to ask for a stay and post a bond or other security. Colorado gives a short pause. C.R.C.P. 62(a) bars execution for 14 days after entry of judgment. Its small claims Rule 517(a) gives no automatic stay at all, so execution can issue right away unless the court grants one. Florida Rule 1.550(a) holds execution until the judgment is recorded and the rehearing period has run, or until a timely rehearing motion is decided. The amount of security can come down. Texas sets it at compensatory damages, interest for the estimated length of the appeal and costs, capped at the lesser of half the association's net worth or $25 million. Section 52.006(c) of the Civil Practice and Remedies Code lets the trial court go lower if that amount would cause substantial economic harm. Florida section 45.045(2) lets a court reduce the bond for good cause, unless an insurance or indemnification policy applies to the case. Price the appeal before you vote on it. Get a written fee estimate, add the bond cost and the interest that keeps running if you lose, and compare the total with paying now.

Send the judgment to every insurer

Do this on day one, even if a carrier defended the case. Send the signed judgment to the agent and the claims adjuster on the general liability, directors and officers, and umbrella policies. Ask for a written answer on each line of it: damages, the other side's attorney fees, court costs and post-judgment interest. Expect the answer to split. One policy may pay damages and refuse a fee award, and the deductible stays with the association either way. Ask who pays interest while the carrier decides and whether it will help with a bond. Get those answers before the board sets an assessment amount, because whatever the carrier pays is money you don't have to bill.

What the creditor can reach

Plan as if the operating and reserve accounts are both exposed. A recorded judgment can become a lien on association real estate under Tex. Prop. Code section 52.001, Fla. Stat. section 55.10 and C.R.S. section 13-52-102. A judgment holder can seek garnishment under Tex. Civ. Prac. & Rem. Code section 63.001(3) and Fla. Stat. section 77.01. Texas section 31.002 lets a court order nonexempt property turned over or appoint a receiver to take and sell it. A garnishment can tie up the account that pays the insurance premium. California offers a narrow shield. Civil Code section 5620 exempts regular assessments from execution only as far as needed for essential services such as utilities and insurance. We did not find a matching section in Texas Property Code chapter 209, Florida chapter 720 or Colorado's common interest act, so ask your attorney what your state protects. Don't move money to a new account to dodge the creditor. Texas section 52.006(e) preserves a court's power to bar a judgment debtor from dissipating or transferring assets. When owners ask about personal exposure, the usual route is an assessment. C.R.S. section 38-33.3-311(1) says an action over an association's act or omission goes against the association, not a unit owner. Florida section 718.119(2) limits a condominium owner's direct liability to a pro rata share, capped at the unit's value.

Get a payoff figure and count the daily cost

Have your attorney request a written payoff from the other side showing principal, attorney fees, costs, interest through a stated date and a daily amount after that. The interest rules differ. Texas Finance Code section 304.003 uses the prime rate with a 5 percent floor and a 15 percent ceiling when no contract rate applies. Colorado section 5-12-102(4) uses the written contract rate, or 8 percent compounded annually. Florida's Chief Financial Officer sets a quarterly rate under section 55.03, and it resets each January 1. Injury cases can follow different rules, so read the judgment. A $60,000 judgment at 8 percent costs about $13.15 a day, or about $395 every 30 days. Put that number in the board packet when someone argues for waiting on a slow assessment.

Raise the money in this order

- Insurance. Count only what a carrier has confirmed in writing. - Operating cash. Use what is left after a realistic list of bills through the next assessment date. - Reserves. These are often restricted, so check the declaration and state law first, and write a repayment plan if a loan from reserves is allowed. - A bank loan. It spreads the cost and spares owners a single large bill, but it can take weeks. Ask the creditor for a short written standstill while it closes. - A special assessment. Our guide on levying a special assessment covers the steps. California Civil Code section 5610(a) treats an extraordinary expense required by a court order as an emergency outside the section 5605 limit. Florida section 720.303(2)(c)2. requires written notice and posting at least 14 days before a meeting that will consider a special assessment, and the notice must state the nature of the assessment. Elsewhere, look to the declaration for caps and votes. Colorado section 38-33.3-315(2) generally spreads common expenses across all units under the declaration's allocations. In Texas, section 207.003(b)(8) and (9) require the resale certificate to show the total of unsatisfied judgments and any pending lawsuit. Update your resale template the day the judgment is entered, and again the day it is released.

Pay it and clear the record

Pay the way your attorney directs, usually by wire to a trust account or into the court registry, and exchange the money for signed release papers. Collect a Form W-9 from each payee first. The IRS instructions for Forms 1099-MISC and 1099-NEC say compensatory damages for nonphysical injuries generally go in box 3 of Form 1099-MISC, damages for physical injury generally are not reported unless punitive, and gross proceeds paid to an attorney go in box 10. Have the CPA read the judgment. Then get a satisfaction or release of judgment filed with the court and recorded in every county where the judgment was recorded. Florida section 55.141 offers a route if the other side stalls. Before a levy of execution, the association can pay the full amount with interest and costs into the court registry and pay the recording charge, and the clerk records a satisfaction that discharges the lien. Motion wording you can adapt: 'I move that the association pay the final judgment in Case No. [number] in the payoff amount of $[amount], good through [date]; fund it with $[amount] from insurance, $[amount] from operating cash and $[amount] from a special assessment to be considered at a properly noticed meeting on [date]; authorize [officer] to sign payment and release documents through counsel; and direct the treasurer to confirm that a satisfaction of judgment is recorded.'

A sample timeline and common mistakes

A Colorado district court enters a $60,000 judgment on March 2: - March 2: calendar the dates and send the judgment to insurers. - March 5: closed session with the attorney on appeal, stay and payoff. - March 16: last day for a post-trial motion, and the automatic stay runs out. - March 25: carriers answer, and the board votes in the open to pay. - April 15: the money arrives from a loan or assessment, and the attorney wires the payoff. - April 20: the appeal deadline passes if no post-trial motion changed it. - April 30: satisfaction filed and recorded, resale records updated, file closed. The mistakes that cost the most: - Waiting for the regular monthly meeting when the stay lasts 14 days. - Assuming a notice of appeal stops a garnishment. - Billing owners before insurers answer. - Paying without a recorded satisfaction, then finding the lien during a home sale years later.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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