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GlenL
(Ohio)

Posts:1373

12/21/2006 10:46 PM
Pedro, I don't know if this will help or not. I am on the BOD of a condo complex in Ohio and this year we've hired an attorney who specializes in collections. We had to force a sheriff's sale on one homeowner this year and are working are way towards another. We do not turn someone who is a little late over to him, only when it gets to the lien stage, he adds fees to the amount owed and when he collects he gets paid; no collection - no fee to the Association. He collects we get our money, he gets the fees. I don't know if it would work in your Association or if your state laws would allow this, below is a section of the newsletter reminding people what would happen. The Board has hired a new attorney to handle Association legal matters. Every homeowner should have received an introductory letter from ____ & _________ Co., LPA explaining their collection procedures which reads in part. “An attorney’s fee of 50% of all amounts due the Association, including past and future condominium fees, assessments, late charges, lien fees, and court costs will be assessed until the unit owner’s account is brought current.” It also states “In the event that payment is not expeditiously made, this office will file a foreclosure which unfortunately, increases the amount of court costs that the unit owner is required to pay. In addition, in a foreclosure, the unit owner is also subject to an additional assessment for the reasonable rental value of the condominium unit.” This means for example: If you owe $1,000.00 in past due fees and court costs it will cost you $1,500.00 to get current and ALL of your ongoing fees (Condo, late fees, etc.) will increase by 50% until you are current. As far as the reasonable rental value of a condominium unit, look in the paper it isn’t cheap.

BradP
(Kansas)

Posts:1742

12/22/2006 6:47 AM
Pedro: If you want money now then the best way to get it is to hit people where it hurts. You can do that through several means: 1. Suspend pool privileges, figure out a way to get it done. 2. Suspend voting rights 3. Send them to a collection agent, Most people will pay the debt because if they don't it becomes a part of their record that will haunt them for the next 7-10 years if and when they try to buy a car or a house or anything of high value. 4. Place a lien on their home and force foreclosure. The risk of losing a home would be enough for most. If you are looking for a way to get money now those are the things that would work on me. Publicizing my name would not work and would be counter productive. I would purposely withhold the money out of spite for the BOD and when and if I paid I would make their life as miserable as I could. They are a lot of smart, experienced BOD members on here. I have yet to hear one of them say that is a good idea, your not the first one to bring it up. I really don't think anyone is personally attacking you, I certainly am not, I am just trying to express my opinion. You are correct a lot of people do publicize it, I just strongly disagree with those tactics.

RonaldW
(South Carolina)

Posts:900

12/22/2006 7:57 AM
I agree with the others that posting delinquent member's names is counterproductive. In the end, they are your neighbors and feellow HOA members. Further, letting the other members know that some are not paying might give them the idea to stop paying. At the every most, announce that "a few" members are delinquent and that the board is taking legal action to collect. Follow through with whatever legal actions you are permitted to take. Do it ASAP, the longer this is allowed to go on, the harder it will be to collect.

Ron SC

WilliamT
(Arizona)

Posts:489

12/22/2006 9:32 AM
Pedro, I have no intention of re-reading your post(s). In fact I don't plan to read any of your future posts, so this is the last response you will have from me. I'm deselecting the box so that it will not send me an email when you make another post and I won't be aware of it. When you come here and attack people, calling them (me) pompous and saying that all you get is the "moral compass of this group" who has taken their valuable time to offer you their opinons using their knowledge and experience, which is obviously superior to yours, then you are not doing anything to make people want to help you further. You don't have to agree with, or accept anyone's opinion or recommendation, but don't expect help when you call us pompous and say in so many words that our opinions are worthless to you. If you expect people here to do your homework for you, such as quoting laws, providing collection agency, morgage company statistics, etc, then you're going about it the wrong way. You've been told that several states including AZ have laws that require the discussion of a members financial situation to be discussed in closed session. If it were not for your attitude of attacking people who are trying to help you, and have given excellent advice, I would have given you the url to that law. But since you are implying that what I said about the AZ law is not true, and since you choose to call me "pompous" and tell this forum that "instead I have in fact got is the moral compass of this group", then you can look it up yourself. Look under Arizona Revised Statutes. Go ahead and tell your members who is delinquent, that's what it appears you are looking for support to do, and see if that gets you money faster. Then when someone sues you for publishing their financial information see how fast your attorney tells you "I recommended that you not do this". There may not be a law against it in your state, but that does not stop the homeowner from suing you for harassment and libel. Maybe your D&O insurance company will also say they won't defend the suit because the board was negligent in their duties by publicing private financial information for the purpose of harassment. I also doubt that your CC&R's give the board authority to publish the names of delinquents as a collection method. In my "pompous" opinion, when a board elects to publish the names of people who are delinquent in order to exert "peer pressure" as you stated, that is nothing short of harassment, and an attempt to enlist the community to help harass the delinquent homeowner(s). And as someone else very clealy pointed out to you, if there are any errors in your bookkeeping so that the associations financial records are not correct, then the homeowner has legal grounds for a libel suit. So ignore your attorney's advice, and the opinions and advice of the pompus individuals here, who have only given you their "moral compass"; and I wish you the best of luck. I think you'll need it. But that's only my opinion.

PedroC

Posts:0

12/22/2006 2:25 PM
WilliamT; I did not ask for anyone to do my research, I'm doing research in many ways, including this forum. You mentioned these so called state laws, so I'm asking you to specify them. It is often the case that people will cite non existing laws, regulations and so on, just to try and proof their case. This usually works because people tend to backoff when such words are used, but I'm no such individual. I will grant your opinions, but not the use of unsupported high sounding phrases or statements. Again, their is no financial information being proposed for publishing; no social security numbers, no actual arrear amounts; just name and lot. In any case, we have beaten this subject to death. I get it; you are against it! That is your opinion and the opinion of most and that is OK. You just missed the point, so I will help. The point is that collections are activities which are reactive by their very nature. I'm looking for proactive solutions or ideas that will curtail the behavior. Just out of curiosity; why do we jail individuals? Why do we fine individuals? Simple, deterrence. This is the simple answer to these very complex question. In these cases, the offending individual is used as an "example to himself/herself and others". The hope of society is to convince people to avoid future violations and comform to agreed upon standards. Of course, we can discuss at length whether or not these systems work. I thank you all for the great discussions.

BradP
(Kansas)

Posts:1742

12/22/2006 2:46 PM
Pedro: If you are looking for deterrence then have rules and regs that supports collection agents, liens and foreclosure. Those are real consequences that 95% of people don't want.

BrianB
(California)

Posts:1741

12/22/2006 4:40 PM
Actually Pedro, the answer to "why do we jail people" may not be deterrence. Many many people believe that rehabilitation is the answer to that question, and most penal systems in the US are set up with that goal in mind. That is one of the huge dichotomies of our penal system, is that we as a community do not agree on whether jail is deterrent based or rehabilitation based, and thus, we force the system to do both, badly, rather than one, well.

PedroC

Posts:0

12/22/2006 6:59 PM
Brian, You are correct about those who have committed the offense and are presently serving time. However, for those who have not it is deterrence.

PedroC

Posts:0

12/22/2006 7:04 PM
Brad, We have thought about hiring a collection agency and turning over those accounts that are severely overdue. One of the suggestions of hiring an attorney that specializes in collections is also a good possibility.

HaroldS
(Arizona)

Posts:904

12/22/2006 7:31 PM
Just be sure whoever you select adheres to the Federal Fair Debt Collection Practices Act. Be aware that a person can stop a debt collector from further contacting them about the debt by writing a letter and telling them to stop. That doesn't mean they no longer owe the money, but it does mean you are back to square one. Good luck. Harold

RonaldW
(South Carolina)

Posts:900

12/23/2006 5:52 AM
Posted By PedroC on 12/22/2006 7:04 PM Brad, We have thought about hiring a collection agency and turning over those accounts that are severely overdue. One of the suggestions of hiring an attorney that specializes in collections is also a good possibility. Another option is to take the person to small claims court. I think hiring the attorney is the best idea. Our CC&Rs allow us to collect any costs associated with the collection so we would get the amount due and the other party would pay legal costs in addition to the amount owed. In the end, the association gets what is owed and there is little chance of doing something wrong and being sued by the other party.

Ron SC

GlenL
(Ohio)

Posts:1373

12/23/2006 8:30 AM
Ron, we went the small claims court route going after the parents of some kids who broke into the clubhouse for the $1,300.00 it cost us to repair. I went down on my own time to represent the BOD and got a judgment. YEAH!!! Not so fast turns out in the State of Ohio (check local listings) if you're incorporated even as a nonprofit; the corporation has to be represented by an attorney so the judgment was overturned. In the end we never got the money and had to pay an attorney. The moral of my story is check and make sure you don't need an attorney before you try to do it yourself.

BradP
(Kansas)

Posts:1742

12/23/2006 9:41 AM
Harold is right, they do have that option. But the only way to get something off of your credit report is to pay it. You still have the option to report it. I might be in the minority, but I keep a pretty tight reign on my credit report and that would have the best effect on me.

RonaldW
(South Carolina)

Posts:900

12/24/2006 5:45 AM
Posted By GlenL on 12/23/2006 8:30 AM Ron, we went the small claims court route going after the parents of some kids who broke into the clubhouse for the $1,300.00 it cost us to repair. I went down on my own time to represent the BOD and got a judgment. YEAH!!! Not so fast turns out in the State of Ohio (check local listings) if you're incorporated even as a nonprofit; the corporation has to be represented by an attorney so the judgment was overturned. In the end we never got the money and had to pay an attorney. The moral of my story is check and make sure you don't need an attorney before you try to do it yourself. I'm really surprised that the judge in the small claims court didn't know this and decline to hear the case. So you did hire an attorney and still didn't get the money? I probably didn't give enough thought before I worded my post about small claims court. I would never attempt to do something like this as a representative of the HOA without an attorney or at least the legal advice of an attorney. Your members pay dues to fund the association, spending dues money on an attorney for the benefit of the association (such as collecting restitution) is an appropriate use of this money.

Ron SC

GlenL
(Ohio)

Posts:1373

12/24/2006 9:22 AM
Ron we went the route of small claims because it seemed open and shut; kids did vandalism, kids got caught and sent to jail, parents responsible to pay damages. I don't remember how much the attorney we had at the time was making but it seemed more cost effective to do it this way. Besides I was new to the BOD and thought I could do it because I had used small claims to go after someone who owed me personally. At the original trial I was the only one who showed and I got a default judgment; the other parties then appealed which is when we found out about having to have an attorney. After we got the second judgment with the attorney, the parents separated and while we could have gotten the $1300.00 most if not all would have gone to the attorney. So we decided to cut our losses and call it a day.

WilliamT
(Arizona)

Posts:489

12/24/2006 10:02 AM
Posted By GlenL on 12/24/2006 9:22 AM Ron we went the route of small claims because it seemed open and shut; kids did vandalism, kids got caught and sent to jail, parents responsible to pay damages. I don't remember how much the attorney we had at the time was making but it seemed more cost effective to do it this way. Besides I was new to the BOD and thought I could do it because I had used small claims to go after someone who owed me personally. At the original trial I was the only one who showed and I got a default judgment; the other parties then appealed which is when we found out about having to have an attorney. After we got the second judgment with the attorney, the parents separated and while we could have gotten the $1300.00 most if not all would have gone to the attorney. So we decided to cut our losses and call it a day. Regarding vandalism, I saw an article somewhere about an HOA who caught a vandal. As I recall, they worked out a deal with the police department and family to not prosecute the boy provided the parents agreed to restitution and the boy agreed to community service designated by the PD. Had the parents and the boy not agreed, then the HOA would have prosecuted as a criminal felony case. Vandalism is rampant in all neighborhoods now, no matter the value of the homes so it's time to take a tough approach, in my opinion. Since vandalism is a felony in AZ it is not difficult to guess which option the parents of the vandal, and the vandal will choose. Once they understand the future implications of having a felony record, I believe every parent and vandal child will opt to pay up and do the community service. That's the road we will take if we catch some of our local vandals. The problem with a civil suit against vandalism, whether through the small claims court or superior court is that you still have to go through the process of collecting the judgement after it's won. You place a lein, and may or may not be able to foreclose to collect. Without reviewing the law, I don't believe an HOA would be able to foreclose in AZ on this type of judgment. By offering the option of facing a criminal felony trial, or restitution and community service, the deal is done in a rather short period of time. The HOA can inform the parents that they do not want to involve the parents in a court battle, and they especially don't want to see the child face a felony child, so the HOA is doing the family a favor by offering this option so the child can take the consequences of his action and still continue to be a welcome member of the community. That should is most cases keep the animosity from getting out of hand.

HaroldS
(Arizona)

Posts:904

12/24/2006 10:40 AM
and while we could have gotten the $1300.00 most if not all would have gone to the attorney. So we decided to cut our losses and call it a day.>> I'm confused: Didn't you still owe the attorney? Harold

GlenL
(Ohio)

Posts:1373

12/24/2006 7:06 PM
Yes we lost out on the $1300.00 and the attorney fee. An expensive lesson, we've since changed attorney's to one who specializes in collections and only gets paid when we collect. Because it was filed in small claims, we didn't ask for attorney fees when it was filed.

JudyF
(Colorado)

Posts:2

12/25/2006 10:52 AM
WilliamT are you from HindmanSanchez?

WilliamT
(Arizona)

Posts:489

12/25/2006 1:00 PM
Posted By JudyF on 12/25/2006 10:52 AM WilliamT are you from HindmanSanchez? No, I'm just a board member from Gilbert.

RobertR1
(South Carolina)

Posts:2147

12/25/2006 1:51 PM
Pedro, We have common water to each unit. We can turn the water off to each unit. Man Pedro you sure got yourself in a scrum asking some questions. I hear where you are coming from. You have no idea for the most part about who is giving you advice, and you don't know me, so I don't mind if you question why I say what I say. I expect you are trying to clean up someones mess and have to believe that other people have the same problem and you are asking how do you get out of a tight spot. Well, maybe you can't get out the way you want to and maybe all the advise is valid, or maybe the next guy that posts will have a solution. I would take anything you read here as well intended advice, but no one is in your shoes and you certainly sound like you are capable of making a decision. I'm sure I learned something from all your posts and replys and I wish you good luck in trying to do the right thing. When all is said and done, if your motivation is pure and you are reasonable, and you step in the mud pie, you can be sure all of us posting here has been in the old mud hole a time or two.

PedroC

Posts:0

12/27/2006 10:02 AM
RobertR1, Thank you for your comments. Your points are well taken and I agree with your for the most part. You are right about me looking at my peers for advise and hoping someone else had methods that worked for them. As an association where the only common elements are open spaces and some recreational facilities, our option for nudging people to pay their monthly dues are limited. Unfortunately, we all have to make up the difference and its hurting our community. Thanks, Pedro.

CathyG
(Arizona)

Posts:10

12/29/2006 2:14 PM
Allowing someone to fail to pay their association dues for years is negligent on the boards part. That does not allow them to carry on the negligence and post the names of the offenders. Take all the necessary steps allowed by law to collect the bad debt, and when you have to raise the dues for the entire community you are allowed to tell them it is due to the number of delinquent funds (as long as you don't specify who is delinquent).

RonaldW
(South Carolina)

Posts:900

12/30/2006 5:03 AM
Posted By CathyG on 12/29/2006 2:14 PM ................, and when you have to raise the dues for the entire community you are allowed to tell them it is due to the number of delinquent funds (as long as you don't specify who is delinquent). I think I said it before, but I would never admit to the members that other members are not paying their assessments for fear that they would think that if others are not paying, why should I pay?

Ron SC

RogerB
(Colorado)

Posts:3701

12/30/2006 6:38 AM
One of our monthly financial reports to the Board is the net total accounts receivable. No addresses nor names are given to the Board until such time as we are advising an owner about the potential filing of a lien. Then the Board is advised prior to filing the lien.

Roger Borcherding Official HOATalk.com Sponsor DARCO Property Management (Colorado) (303) 925-0150 *See legal notice below (end of page) or go to www.hoatalk.com/legal

RobertR1
(South Carolina)

Posts:2147

12/30/2006 7:33 AM
Roger, When you have to file a lien for delinquent owners not paying assessments: a. What kind of a lien should you file? b. Do you use a different lien when a foreclosure is involved? Our CC&R state that liens can be paid from the sale of the property. If a foreclosure is involved and we have filed a lien, we go in line behind the lenders to the property when the foreclosure is settled. South Carolina is probably different than most states but do you know of any way to INSURE the Regime will be paid in the event of foreclosure. I suspect a lot of HOA's have lost a lot of money through foreclosures. We seem to hire a lawyer and he files a mechanics lien,good or bad?

CharlesW1
(Georgia)

Posts:818

12/30/2006 7:45 AM
RobertR1 I’ve been reading alone and it seems you have been given some very good advice. This is my first year being on the board. I’m in the process of learning myself. I do know that a POA is encouraged. It’s a lot of hard work, but well worth it, in the long run. Use the search box for more details on previously posted discussions. This discussion forum is very informative to me on a daily basises. I’m sure you will get the advice you are seeking. Best of luck Chuck W.

Charles E. Wafer Jr.

JulieS
(Georgia)

Posts:412

12/30/2006 7:56 AM
Something you could look into that may help is changing from an HOA to a POA. We are in the same situation...people haven't paid in years. We have judgments against homeowners and are now stuck with trying to find out where they work, etc., in order to start garnishments. POA's lend more to the association in the ability to collect. Changing to a POA is our goal for 2007. Additionally, I would never publish the names of anyone who hasn't paid. It defeats the sense of community the BOD is trying to promote.

RobertR1
(South Carolina)

Posts:2147

12/30/2006 9:47 AM
JulieS, In South Caroline condos seem to be a different animal. We are by state law: (Name of Condo) then added: Horizontal Property Regime, Inc. We are located on an island that is gated by our Property Owners Associate, which operates like an HOA I suppose. ALL belong and pay dues to the POA, we have different neighborhoods that have their own HOA and pay to their HOA, we have condos and those folks pay assessments to their Horizontal Property Regime. Then we have individual home owners that don't come under any HOA's. All Golf Courses, pools, resturants, Marina, Gym are owned by developer and you can elect to pay Membership into that, but you cannot be excluded if you desire to join or sell your unit, the buyer attains that right to join Club.

PedroC

Posts:0

12/30/2006 11:27 AM
CathyG, No one allows a deadbeat to be delinquent for years, they are delinquent by their very nature. As I stated on numerous occations; we are taking all the legal remedies allow to the association. The problem with the legal remedies is that they do not correct the behavior and the homeownwers just continue to not make payments. Until you collect, which could be never after lenders and banks have their piece, they do not feel the effect of liens, small claim judgements or foreclosures. Again, I'm looking for something that will correct or curtail the problem. In HOAs where the common elements are the structures, the roads, parking, utilities, etc. it is very easy to make a person's life difficult and thereby force the issue. In communities where everyone owns their own piece of property and the common elements are limited to open spaces and recreational facilities, it is extremely difficult to force people to pay their dues. You are almost dependent on the civility of individuals. The threat of legal action does not and has not phased these individuals. You need to understand that not all HOAs are condos and/or gated communities where everything except the air within your unit is common. Believe it or not, there are other types of HOAs. Please get off that high horse and reserve your judgements. Pedro.

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