The Puerto Rico Court of Appeals recently upheld the Palmas del Mar Homeowners Association's (PMHA) claims against Knights Round Table, LLC (KRT) for unpaid maintenance fees and legal costs. This ruling affects homeowners associations across Puerto Rico seeking to enforce dues and legal fees against delinquent members.

The court's decision, issued on September 21, 2026, confirms the lower court's rulings in two related cases, TA2026AP00845 and TA2026AP00846. The court's opinion emphasized the importance of contractual obligations and the need for clear evidence when claiming legal fees.

Background

The dispute began when PMHA filed a lawsuit against KRT on April 7, 2026, claiming that the company owed maintenance fees, late charges, administrative expenses, and legal costs associated with its commercial properties in Palmanova Plaza. PMHA sought a total of $5,899.58 in the first case and $6,045.88 in the second case.

After several legal proceedings, the lower court ruled in favor of PMHA in both cases on June 22 and June 23, 2026. The court ordered KRT to pay the amounts claimed, but it only awarded a portion of the requested legal fees. PMHA disagreed with the lower court’s decisions regarding the legal fees and filed motions for reconsideration, which were denied.

The Ruling

The Court of Appeals, led by Judge Boria Vizcarrondo, reviewed the lower court's decisions and upheld them. The court stated, "The absence of evidence documenting the agreed-upon legal fees prevents us from agreeing with the appellant's claims." The judges confirmed that PMHA was only entitled to a percentage of the total debt as legal fees, specifically 10% of the awarded amounts.

In the first case, the court reduced the legal fees from $1,425.34 to $447.42 and in the second case from $1,461.64 to $458.42. The court found that PMHA had not provided sufficient evidence to support its claims for the higher amounts, as the relevant contract documentation was not included in the motions.

Impact

This ruling reinforces the necessity for homeowners associations to maintain clear and documented agreements regarding fees and charges. It emphasizes that mere allegations are not sufficient to establish claims for legal fees in court. The decision also highlights the importance of presenting all relevant documentation at the outset of legal proceedings.

The court's ruling may set a precedent for similar cases in Puerto Rico, where homeowners associations may face challenges in collecting dues and legal fees without clear evidence of contractual agreements. This case serves as a reminder for associations to ensure they have all necessary documentation before pursuing legal action.

What's Next

While the ruling can be appealed to the Supreme Court of Puerto Rico, it remains to be seen if PMHA will pursue this option. There are no related cases pending at this time.