KeithH7
(Florida)
Posts:10
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| 01/16/2012 6:47 PM |
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Is it permissible / legal for an HOA to make public via the same medium it uses for Meeting Notices, Meeting Minutes etc., a list of the names of its members owing HOA dues?
This would be an additional step in the collection process before seeking litigation.
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LarryB13
(Arizona)
Posts:425
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| 01/16/2012 7:40 PM |
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By "public," do you mean a notice to other property owners or do mean a billboard or newspaper ad for the world to see?
I am not familiar with Florida law, but I see nothing wrong with identifying non-paying owners to the rest of the owners. When they purchased their properties, the owners entered into a contract with the association and all its members. I see no reason why those who fail to perform their obligations should expect that they may do so in secret. If it were up to me, I would erect a 10-foot tall day-glo orange sign on each delinquent property. |
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MarkM19
(California)
Posts:7
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| 01/16/2012 10:12 PM |
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Larry,
I totally agree with you and have brought it up many times. I think that this would be the best collection method any HOA could use. I think if you gave everyone notice and told them that anyone with a outstanding balance as of a certain date would be published. The remaining HOA would become the collection committee. If nothing else they would know who is causing the increased dues to make up for the none payers.
Has anyone ever done this? We all would love to use this if it was already tried.
Mark |
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GlenL
(Ohio)
Posts:3621
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| 01/17/2012 3:07 AM |
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We have discussed this numerous times and the consensus is that it is a bad idea. Not only may it be forbidden in the CC&R's, in some states (CA) it may be illegal so at the very least check with your HOA attorney before doing so. We tell interested people to check the county court website to see who the HOA has filed liens on.
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Your board meeting is not held in the Situation Room of the White House. It's not life or death. Let people in, keep it positive, then go home and get a good night's sleep. If you hold off drinking until after the meeting, instead of before or during, you're probably doing OK. JosephW |
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BradP
(Kansas)
Posts:2491
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| 01/17/2012 7:16 AM |
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Here is my take on this situation...most HOA's are already fighting a battle with its members over relationships, mainly because most folks don't understand how an HOA is run but also because there are some incredibly poorly run boards out there that make bad decisions.
I would be curious to see evidence as to the effectiveness of this practice. Most communities have 3 fractions of people, those that are pro HOA, those that don't really care unless it affects them personally, and those that hate HOA's.
By posting that information you may accomplish your goal of collecting some dues, but is the money you collect worth the potential negative publicity and hard feelings you will incur both those personally affected by the postings and those who thing it is wrong? That is something you have to wrestle with.
There are many other options to collect dues which protect the members dignity, I would explore those first. |
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SteveM9
(Massachusetts)
Posts:1529
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| 01/17/2012 8:02 AM |
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Posted By GlenL on 01/17/2012 3:07 AM
We have discussed this numerous times and the consensus is that it is a bad idea.
Consensus? No. Some feel its a good idea including myself.
We list properties by address on a website list of dues not paid. Membership needs to be informed if money is not being received along with expenses of the HOA. Transparency is the key to a functional HOA, not hiding payables or receivables. |
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PeterD3
(Florida)
Posts:448
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| 01/17/2012 8:30 AM |
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| +1. We do it by lot number rather than address. |
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FredB4
(Ohio)
Posts:250
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| 01/17/2012 11:35 AM |
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I have to agree with Brad on this one but it would be interesting to hear from someone who has tried this to know if it is effective and any consequences.
Since money not collected from delinquent owners eventually comes out of the pocket of the other owners, I would think that they have a right to know this information.
Not sure what good it would do since only the board can do anything about it anyway and usually people not paying can't pay and/ or probably don't care what others might think.
Obviously, if you have served on a board you know how complex collecting delinquent dues can be, so be prepared to explain it to the angry owners who may not understand why they are paying extra because the board is unable to collect what is owed. You know the old saying "opening up a can of worms". |
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BB5
(Missouri)
Posts:122
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| 01/17/2012 12:15 PM |
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| Maybe a board should be a little more transparent about the money they have spent, money they DIDN'T have now trying to collect by raising dues. |
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FredB4
(Ohio)
Posts:250
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| 01/17/2012 1:28 PM |
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For transparence ...
There should be a proposed budget for the coming year showing all expected expenses reflecting potential increases. Also, there should be an end of year profit and loss statement showing all of last years expenses on which the new budget is based.
Owners are legally entitled to that information.
In addition there should be a reserve projection showing future expected major capital expenses with an accounting of past, present and future reserve contributions.
I would think your CC&R's cover this and state law as well. |
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BradP
(Kansas)
Posts:2491
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| 01/17/2012 2:13 PM |
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Posted By SteveM9 on 01/17/2012 8:02 AM Posted By GlenL on 01/17/2012 3:07 AM
We have discussed this numerous times and the consensus is that it is a bad idea. Consensus? No. Some feel its a good idea including myself. We list properties by address on a website list of dues not paid. Membership needs to be informed if money is not being received along with expenses of the HOA. Transparency is the key to a functional HOA, not hiding payables or receivables.
The board can be transparent by telling membership x lots haven't paid, these are the steps we are taking to collect, etc. I really don't see the value of publishing lots, addresses, whatever as in my opinion all that does is create hard feelings and create a wall between the board and membership |
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MelissaP1
(Alabama)
Posts:2207
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| 01/17/2012 2:51 PM |
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We ONLY let the board members have a copy of the COLLECTIONS report. We ONLY talked in Lot #'s and NOT personal names/addresses. This way we could address the issue in the OPEN meeting in front of ALL the members without revealing one's personal identification. This way the membership knew what actions we were taking to address the issue of non-payment but not necessarily the personal details. If they wanted to know who it was then they could access the neighborhood map with the lot #'s on it but they couldn't do anything about it.
I think this creates a "Vigilantism" situation in your HOA to reveal neighbors names or personal information. Would I want someone to know I owed money? It's a double edged sword. How would you feel if your name was posted? Especially if the reason you didn't pay was personal or a mistake?
My opinion is it is a BAAAAD idea to post this information. The board just needs have an action plan and to take action. Our HOA agreed that if you were 6 months behind in dues a lien was placed. A year or more of having a lien, we would investigate pursuing foreclosure procedures. It really depended on the circumstances. We had several members catch up or pay because they knew they were coming up on the 6 month mark or year. This type of system is what I would suggest. Imposing a time and/or money limit and follow through with legal action of lien/foreclosure. That's it. |
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Former HOA President |
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BonnieG1
(Nebraska)
Posts:350
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| 01/17/2012 5:38 PM |
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| Our documents written in 1981 state we are to post past due amounts. However since laws have changed since 1981, to protect privacy we do not post the aging report. |
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PeterD3
(Florida)
Posts:448
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| 01/18/2012 4:08 AM |
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Despite the fact that we do something similar as mentioned earlier...Florida HOA members have the right to inspect all assn. records with few exceptions of which this is not one of them.
Simply tell the membership if they want to know the info to go and review the records.
Those who wish to know will, those who don't... won't. |
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JohnC46
(South Carolina)
Posts:621
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| 01/18/2012 7:03 AM |
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Many private clubs will put up a list of dues delinquent members where all can see it. It does shame some into paying.
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BradP
(Kansas)
Posts:2491
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| 01/18/2012 8:31 AM |
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John:
I understand that, but how do you decide who is on the list? For example, if someone is in bankruptcy will you put them on the list? What is someone is going through a difficult financial time either through loss of job or death of a spouse and is scrambling to pay bills? What if someone's child or spouse has a serious illness that requires the use of their funds to pay hospital bills to keep them alive?
Do all these folks make your list? |
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FredB4
(Ohio)
Posts:250
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| 01/18/2012 9:14 AM |
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| We always offer delinquent owners a payment plan agreed to by the board to pay off what they owe. That usually proves successful since it is more of a win win situation. If they dont follow through then we continue with the normal collection process. |
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JohnC46
(South Carolina)
Posts:621
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| 01/18/2012 2:52 PM |
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BRAD
While not advocating such, it is a practice some use. The times I saw it used was when the member was more then a specific time behind (usually 90 days), their name(s) were posted on a board for all to see as they walked into the club.
FRED
I agree with this methodology but there may come a point when nothing can be collected, so I think the pressure has to be ratched up some. Politely, but ratched up.
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FredB4
(Ohio)
Posts:250
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| 01/18/2012 3:14 PM |
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| John you are right. However they only get one chance. If they miss a payment then it is over. Generally, if they are in serious financial difficulty they don't bother setting up a payment plan in the first place. It has to be requested and approved by the board. |
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MelissaP1
(Alabama)
Posts:2207
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| 01/18/2012 3:31 PM |
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I don't agree that someone in financial difficulty won't make the effort to make arrangements. That's just an ASSUMPTION...I found many people who I knew having financial difficulties to be the first to make arrangements to pay their bills. We had 1 member who we arranged that they could pay half their dues without late fees for a period of time as long as we didn't place a lien on her property in 6 months. She was able to catch up on her dues and didn't risk a lien doing so.
The ones who didn't pay in our HOA typically were more of the "Professional" type of owners who used the properties as investments. A LLC is very difficult to make pay up by the way...So each situation is different and should be handled as such...
It's the "golden rule" when you live in a HOA...Would putting your name in print help you pay? Then why should it make someone else pay? Treat people like you want to be treated not how you want to treat people... |
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Former HOA President |
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SteveM9
(Massachusetts)
Posts:1529
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| 01/18/2012 4:25 PM |
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Would putting your name in print help you pay? Then why should it make someone else pay? Treat people like you want to be treated not how you want to treat people...
Has nothing to do with treating people the right way or wrong way. HOA is a business. Membership should know if there is no income coming in, the same way they should know when payments go out. If your transparent with your finances it will be no surprise to anyone if dues need to go up, liens need to be placed, service need to be cut, etc.
HOA life is so much easier if your are transparent with your finances, voting, policies, etc. |
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FredB4
(Ohio)
Posts:250
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| 01/19/2012 4:57 AM |
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Melissa,
Just to clarify. when I said SERIOUS finiancial difficulty, I was refering to owners who were at a stage where they had stopped paying property tax etc.
However, we give everyone the same opportunity to make a payment plan. Yes it is an assumption based on our experience.
Steve,
You are right. When you stop treating it like a business that is when you start getting into trouble. I wish owners realized it was a business. No matter how many times you try and explain it they still cry "your picking on me" when they want to be treated differently from other owners. |
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KellyM3
(North Carolina)
Posts:450
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| 01/19/2012 7:09 AM |
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If an HOA wants to be treated in business-like fashion, then it should act in a business-like fashion, including how to navigate the delicate process of collecting delinquent dues. How would a bank or other holder of property-secured debt handle a delinquent account? The HOA is no different and should be no different when seeking a collection. No business will post or email publicly the delinquent accounts of its customers without following a legal process of notification as defined by law.
You don't have to publicly shame people in order to prove you have "clout" in seeking the collections of delinquent fees. You can bet your bottom dollar than a current HOA director, if hard times hit them, would eagerly insist on placing their name on the neighbor deliquency list in the name of financial transparency.
It's completely petty and carries the HOA nowhere in obtaining past-due fees to waste time posting a list. Follow the law. Walk softly, carry a big stick. That's why the stick is there. One cannot take an HOA board member as a serious handler of business when they want to discuss embarrassing people over taking the real steps to collect a debt or officially write-off the debt as not collectable. You're fulfilling the HOA stereotype. |
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BradP
(Kansas)
Posts:2491
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| 01/19/2012 7:09 AM |
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Posted By SteveM9 on 01/18/2012 4:25 PM Would putting your name in print help you pay? Then why should it make someone else pay? Treat people like you want to be treated not how you want to treat people... Has nothing to do with treating people the right way or wrong way. HOA is a business. Membership should know if there is no income coming in, the same way they should know when payments go out. If your transparent with your finances it will be no surprise to anyone if dues need to go up, liens need to be placed, service need to be cut, etc. HOA life is so much easier if your are transparent with your finances, voting, policies, etc.
Steve...you can be transparent without naming names. Every meeting we give an update on dues collections, we inform how many homes are delinquent, steps being taken to collect and ramifications of them not paying. I guess it is personal preference, I don't think it is a good collection technique, if I have already dug my heels in and won't pay the HOA publishing my name will only tick me off more, but that is just me. |
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KellyM3
(North Carolina)
Posts:450
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| 01/19/2012 7:11 AM |
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I like and prefer Brad's approach to community notification of the effects of delinquency and property count very very much. The community needs to know it's being bled dry and that current dues payers are subsidizing their neighbors.
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SteveM9
(Massachusetts)
Posts:1529
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| 01/19/2012 7:17 PM |
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How would a bank or other holder of property-secured debt handle a delinquent account?
There is no law against this, its perfectly legal. The laws most people cite are laws regarding companies in the business of debt collecting. A HOA is not a debt collection company. It is an HOA. It has nothing to do with shame, money is owed, this is who owes it. Very simple.
At the town hall if you dont pay your property tax they post your name, adress, in a public area for everyone to see. If you still dont pay, they publish it in the town report. If you dont pay a bank, they file foreclosure paperwork, which is very public and searchable to anyone with an internet connection. Anyone can see this information.
Still want more examples? |
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KellyM3
(North Carolina)
Posts:450
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| 01/19/2012 7:48 PM |
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Posted By SteveM9 on 01/19/2012 7:17 PM How would a bank or other holder of property-secured debt handle a delinquent account? There is no law against this, its perfectly legal. The laws most people cite are laws regarding companies in the business of debt collecting. A HOA is not a debt collection company. It is an HOA. It has nothing to do with shame, money is owed, this is who owes it. Very simple. At the town hall if you dont pay your property tax they post your name, adress, in a public area for everyone to see. If you still dont pay, they publish it in the town report. If you dont pay a bank, they file foreclosure paperwork, which is very public and searchable to anyone with an internet connection. Anyone can see this information. Still want more examples?
Of course, it's legal to shame your delinquent/deadbeat account holder. But, it's low class, arbitrary and is more than pious in its appearance and execution. No, banks and tax collectors don't make priority of telling all the neighbors about a deadbeat account. Their public posting comes a result of a lack of communication in many cases with the account holder in question; it's an attempt to find these people officially or give them the chance, however slim, to learn of their pending foreclosure or collections matter. That's the motive in these cases.
Cut the low class, gossipy, stereotype-fulfilling behavior and focus on collecting cash in the most efficient and legally binding manner possible. Public HOA "outings" of dues payers do not carry the motive of finding the delinquent dues payer. Its motivation is humiliation
Steve, there's a big difference in those motives. Yes, I need to see more examples because your first effort is a swing and a miss. |
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TimB4
(Virginia)
Posts:3801
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| 01/19/2012 7:53 PM |
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Does the membership have a right to know how many lots are delinquent and/or what the total amount of delinquencies are? Yes.
Is it permissible to post the names of delinquent members to the membership? Depends on the governing documents and State laws. I believe the typical answer is yes. This is because most States allow members to review the financial documents of the Association (note: some States do limit this and prevent members from looking at other members records, so check first).
Is it permissible to post the names of delinquent members to non-members? - depends on privacy laws. I believe that the typical answer is no.
This is because although the membership has the right to review association records, non-members do not have those same rights. Therefore, you can't list the names in a newsletter and distribute the newsletter to non-members (renters) or post that newsletter on a website or portion of a website that is available to non-members.
Does it do any good? Depends on your point of view. For those who can't pay, it probably won't make any difference. For those who are concerned about public image, it might get them to pay quicker. For those who just had something in their life requiring more attention than paying bills (illness, death, etc.), they probably would have paid anyway without the public humiliation.
Should the Association publish the names of delinquent members to the membership? That's the real question and the answer is one that an individual has to make on their personal belief.
Who decides? If State law and governing documents are silent, The Association's Board of Directors makes the decision based on a majority vote.
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BradP
(Kansas)
Posts:2491
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| 01/20/2012 12:23 PM |
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Posted By SteveM9 on 01/19/2012 7:17 PM How would a bank or other holder of property-secured debt handle a delinquent account? There is no law against this, its perfectly legal. The laws most people cite are laws regarding companies in the business of debt collecting. A HOA is not a debt collection company. It is an HOA. It has nothing to do with shame, money is owed, this is who owes it. Very simple. At the town hall if you dont pay your property tax they post your name, adress, in a public area for everyone to see. If you still dont pay, they publish it in the town report. If you dont pay a bank, they file foreclosure paperwork, which is very public and searchable to anyone with an internet connection. Anyone can see this information. Still want more examples?
Steve, this is a perfect example of where there is such a divide and rift between a lot of boards and homeowners. Yes, the HOA is a business, but in my opinion you can't run it like the typical cut throat business. HOA's are unique and require a little different approach. After all isn't a goal of an HOA to inspire and promote community growth and togetherness? Yet, we are so consumed with the "business" aspect of the HOA that we forget that. Am I saying forget collecting dues, absolutely not. However, it is one thing to have your name published in the delinquent county tax report when chances are your neighbors will never see it and if they do they won't care. It is another thing to publish delinquent HOA dues when your neighbors will see it. There are other ways to collect and I have yet to see an effectiveness report of the measure you are prescribing. I have always paid my dues but if my hoa every published my name I would make their life miserable trying to collect. |
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JoanneD1
(Arizona)
Posts:269
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| 01/20/2012 7:58 PM |
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| We were considering this at one time and were advised against it in AZ because of some state laws. Be careful! |
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