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Subject: How often are your dues due?
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JackJ9


Posts:0


07/27/2021 12:29 PM  
Our association collects dues on a quarterly basis. Our property manager advises that we are a little odd, most of their other clients collect dues once a year.

Our bylaws allow the board to set the frequency of payments.

I'm just curious if we should change the frequency. It'd cost less in administration fees to collect just once a year rather than 4x per year.
CathyA3
(Ohio)

Posts:2607


07/27/2021 1:39 PM  
We're condos, and condos typically collect monthly around here. There are also a few HOAs in my area that provide things like lawn care, or they have neighborhoods of attached homes that function more like townhomes/condos, and these communities also collect monthly.

Just guessing here, but maybe related to the extent of services provided by the association and when the association has to pay the provider? Condos typically will include utilities in the assessments (water, electricity, and trash pickup), so income needs to keep pace with outgo.
CathyA3
(Ohio)

Posts:2607


07/27/2021 1:41 PM  
One advantage to collecting more frequently is that you'll get an earlier warning if someone is going to have a delinquency issue.
TimB4
(Tennessee)

Posts:17856


07/27/2021 1:48 PM  
Our Assessment is annual.

Members have the option to pay in monthly installments.

50%+ pay monthly.
20% pay annually
30% pay quarterly or semi-annual
AugustinD


Posts:1937


07/27/2021 2:05 PM  
Posted By TimB4 on 07/27/2021 1:48 PM
Our Assessment is annual.

Members have the option to pay in monthly installments.
The above is what I call best practices.
BillH10
(Texas)

Posts:786


07/27/2021 2:21 PM  
Most of our client owners are invoiced monthly.

One is invoiced quarterly.

One is invoiced semi-annually. (The units in this association are selling in the low 7 figure range in a very desirable area in Dallas)

Prepayments of varying amounts are made by 20% of the owners on the monthly invoice plans, some pay as much as a year in advance.
MaxB4
(California)

Posts:1614


07/27/2021 2:28 PM  
Every account I have ever managed in California has assessments paid monthly.
DouglasK1
(Florida)

Posts:1689


07/27/2021 3:53 PM  
In my last association the CCRs allowed for monthly payments. Over the years the board encouraged annual or quarterly payments to lessen the workload for the treasurer. At some point they were telling members that monthly payments were not allowed, and no owners ever forced the issue, but the association would not have come out well if legally challenged.

Escaped former treasurer and director of a self managed association.
LetA
(Nevada)

Posts:1469


07/27/2021 5:06 PM  
It depends on how much your total yearly assessments are. We are billed quarterly, but people pay them monthly because of peoples budgets. If you go yearly, you might paint yourself into a corner and catch some heat from those that can't pay year to year.
LetA
(Nevada)

Posts:1469


07/27/2021 5:07 PM  
Posted By CathyA3 on 07/27/2021 1:41 PM
One advantage to collecting more frequently is that you'll get an earlier warning if someone is going to have a delinquency issue.



Perfect reason to keep your payments where they are currently.
JohnC46
(South Carolina)

Posts:11667


07/28/2021 8:32 AM  
Posted By LetA on 07/27/2021 5:07 PM
Posted By CathyA3 on 07/27/2021 1:41 PM
One advantage to collecting more frequently is that you'll get an earlier warning if someone is going to have a delinquency issue.



Perfect reason to keep your payments where they are currently.




For this reason I prefer monthly payments.
BenA2
(Texas)

Posts:1114


07/28/2021 9:37 AM  
I do not think changing just to be in line with other HOAs makes sense. Every HOA is different. We collect once a year but our assessments are less than $100. I think the higher your assessments, the more benefit there is to collecting quarterly or monthly.
BancsS
(Iowa)

Posts:100


07/28/2021 12:47 PM  
$500 once a year. That works for me.
MikeB23
(Louisiana)

Posts:60


07/28/2021 5:24 PM  
We offer three options, annually, quarterly, or monthly.
JjG
(California)

Posts:2


07/31/2021 4:02 PM  
Just once a year for us, I think that's the usual
DavidG45
(Delaware)

Posts:146


08/10/2021 2:09 PM  
We pay monthly. I would think that is better for everybody.

We are a community of predominantly single family homes with a few townhomes.
NpS
(Pennsylvania)

Posts:4216


08/10/2021 7:24 PM  
Posted By TimB4 on 07/27/2021 1:48 PM
Our Assessment is annual.

Members have the option to pay in monthly installments.

50%+ pay monthly.
20% pay annually
30% pay quarterly or semi-annual




One advantage of annual fees with the option to pay monthly (compared to a straight monthly fee structure) occurs when legal action is needed to collect.

Let's compare $1,200 per year vs $100 per month.

Let's assume that the owner didn't pay anything in Jan, Feb, and Mar. The HOA decides to get a judgment on April 2.

In a straight monthly fee system, the HOA can only get a judgment for $4OO, the amount for the 4 months in arrears at the time of the filing.

But in many annual fee systems with the option to pay monthly, the HOA has the option to accelerate a demand for the full annual amount as soon as the owner becomes delinquent.

In this situation, the HOA can go for a judgment for the full $1,2000 in the April 2 filing.

This approach can be extremely valuable where an owner is chronically delinquent - because - even if you get a judgment for $400 under the monthly system, the award may not happen until a couple of months later, and by then, the owner owes the HOA another $200. Depending on where you live, you may be able to amend your original filing, or you may have to make a new filing for the additional $200. There may be additional fees.

The Annual with Monthly option gives the HOA a lot more leverage with the delinquent owner and a lot less fiddling around with the courts.

Sikubali jukumu. Read all posts at your own risk.
BancsS
(Iowa)

Posts:100


08/11/2021 5:00 PM  
Along these same lines, I just paid dues in July for 2021 and 2022. The HOA fiscal year runs from July 1 to June 30. I am currently in the process of selling my house. Do these paid dues typically transfer to the new owner? I know this is not something you folks can answer but am curious how some of the HOA's around the country handle this situation.

I have checked our bylaws and CCR's and nothing about transfer of dues is mentioned. The CCRs expired anyway and are not in force. They do mention a lot in good standing or not in good standing based on the seller being current on dues. I believe this good standing, not in good standing policy is not enforced these days because several lots in my development seem to have been abandoned and the owners probably don't pay their dues. An undeveloped lot dues would only be $100 anyway. It's an odd situation. I suspect that the Association would be happy to see a new owner come in and develop the property so they may not enforce the good standing, not in good standing policy.

I would appreciate any thoughts on the topic.
AugustinD


Posts:1937


08/11/2021 5:19 PM  
Posted By BancsS on 08/11/2021 5:00 PM
Along these same lines, I just paid dues in July for 2021 and 2022. The HOA fiscal year runs from July 1 to June 30. I am currently in the process of selling my house. Do these paid dues typically transfer to the new owner?
In three HOA/COA home sales, the title company always made sure that I, as seller, was credited at closing for those HOA/COA dues that I had paid beyond the sale's closing day. I think the buyer may have paid for the remaining days in the month (of closing) where the buyer held title to the property.
BancsS
(Iowa)

Posts:100


08/11/2021 5:40 PM  
Posted By AugustinD on 08/11/2021 5:19 PM
Posted By BancsS on 08/11/2021 5:00 PM
Along these same lines, I just paid dues in July for 2021 and 2022. The HOA fiscal year runs from July 1 to June 30. I am currently in the process of selling my house. Do these paid dues typically transfer to the new owner?
In three HOA/COA home sales, the title company always made sure that I, as seller, was credited at closing for those HOA/COA dues that I had paid beyond the sale's closing day. I think the buyer may have paid for the remaining days in the month (of closing) where the buyer held title to the property.



That makes sense. Thanks for the reply.
MarshallT
(New York)

Posts:180


08/12/2021 7:15 AM  
It really depends on what the needs and preferences of the association are. It is not uncommon for monthly dues to be collected (especially in condos). While admin fees may be lower if annual dues are collected, it may also be harder on owners to pay one lumpsum.
CarissaM


Posts:0


08/12/2021 7:22 AM  
A poster mentioned:

_______________________________________________________
Our Assessment is annual.

Members have the option to pay in monthly installments.

50%+ pay monthly.
20% pay annually
30% pay quarterly or semi-annual

_______________________________________________________


If an assessment is due annually, do you have to wait until the end of the year to pursue delinquent accounts?


We assess quarterly, some pay 100% in advance, others on the quarter, and two not at all!
SheliaH
(Indiana)

Posts:4297


08/12/2021 7:53 AM  
Posted By CarissaM on 08/12/2021 7:22 AM
A poster mentioned:

_______________________________________________________
Our Assessment is annual.

Members have the option to pay in monthly installments.

50%+ pay monthly.
20% pay annually
30% pay quarterly or semi-annual

_______________________________________________________


If an assessment is due annually, do you have to wait until the end of the year to pursue delinquent accounts?


We assess quarterly, some pay 100% in advance, others on the quarter, and two not at all!



That depends on your collection policy - and if you don't have one, you need to establish one immediately!

Our community pays monthly, but if people want to pay a year's or six months' worth in advance, that's ok too. It's up to them to keep track of how much they paid - if, say, the person paid 6 months in advance, then month 7 came along and there's nothing left to credit the account, they get a late notice and are subject to the usual penalties.

In your case, I would think there's a due date for the annual payment, say Jan. 1. By Jan. 1, I would expect a payment of some sort and if nothing comes in, that homeowner gets a late notice. I've always said you have to jump on delinquencies early because the longer you wait, the more difficult it becomes to collect.
CarissaM


Posts:0


08/12/2021 7:56 AM  
No, we have a policy and procedure on that. My question was to those who have annual assessments. I'm just wondering is that billed on 01/01 and not "late" until 12/31?


AugustinD


Posts:1937


08/12/2021 8:02 AM  
Posted By CarissaM on 08/12/2021 7:56 AM
No, we have a policy and procedure on that. My question was to those who have annual assessments. I'm just wondering is that billed on 01/01 and not "late" until 12/31?
I would be scouring the CC&Rs for indications of what constitutes "delinquent" or "late." I know the interest rate that many CC&Rs state shall be assessed for late payment is typically pretty high, so this question is of course important.
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