Delinquent HOA Fee solutions

Started by AndyE2 • 7 replies • 740 views

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AndyE2 (Tennessee)
Posts: 1

Posted:

I'm relatively new on the board.
What ideas do you folks have that work on curbing this?

I understand hard times are sometimes unavoidable.
I'd love to know if there are some creative ways to minimize delinquencies.

Thanks for listening.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Add interest and fees, as appropriate.

Lien at an announced point following assessment being due.

In gross cases, foreclosure might be considered.

All the above in context of the level of owed assessment vs the cost of the collection.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I believe that delinquent folks pay little attention to any letters, etc. from the BOD. They do pay attention to a certified letter from an attorney adding charge and threatening further action.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

We had a clear policy of 6 months we liened. 1 year we CONSIDERED foreclosure. There was also a $15 late fee. Which considering dues were $50 month that was a pretty good bit of change. Now along with George's post. Interest can be added to liens/foreclosures. The rate is defined in your CC&R's.

Now will say that we did allow some leniency to those willing to catch up back payments. We may do away with late fees/interest if they paid the lien/legal costs of filing. Foreclosures stop as soon as paid anyways. They are just stop the bleeding steps.

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

Remove common area recreational amenity privileges IF your documents permit it and IF you have any worth removing.

In our urban 'hood, for instance, our HOA high rise has underground Visitor Parking for residents' guests. Owners hate to lose that one.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Quote:

Posted By AndyE2 on 11/26/2019 11:57 AM
I'm relatively new on the board.
What ideas do you folks have that work on curbing this?

I understand hard times are sometimes unavoidable.
I'd love to know if there are some creative ways to minimize delinquencies.

Thanks for listening.

Hi Andy,

The best creative solution is to match your HOA collections policies to state collections laws and handle accounts via a process that will, by law, end in a foreclosure. Also, the HOA board should exercise reasonable restraint for families that have a temporary financial hardship but the onus is on the family to approach the HOA and not for the HOA to assume a delinquent account is anything but "delinquent." Word will travel fast if you just follow the law and show compassion for bona fide cases of hardship in terms of temporary relief.

Many times, HOA board policies on collections will, over time, get out of sync w/ collections law and create convoluted delinquent account processes that are more complex than basic law.

TimB4 (Tennessee)
Posts: 21,044

Posted:

Andy,

People will act how they will act.
The best your Association can do is follow your procedures to the letter.

Our procedure is:

30 days - informal letter (typically, except for repeat offenders, offer to waive late charges if brought current by mm/xx/yyyy).

60 days - formal letter (no waivers)

90 days - formal letter, (sent via certified mail & first class mail) notating that if the account isn't brought current by mm/dd/yyyy, the issue will go to the board.

120 days - formal letter, notice of agenda item for board meeting to be held on mm/dd/yyyy.

within 1 week of board meeting, formal letter (sent via certified mail & first class mail) informing the member of the boards decision (typically, bring current by mm/dd/yyyy or issue goes to attorney for collection and possible foreclosure).

On mm/dd/yyyy contact attorney with info and they handle it from there. All further communication with member goes through attorney until account is brought current.

Having served as treasurer, I have seen members that respond immediately to the 30 day letter. Members who always wait until the 90 day letter. One member, has happened for several years in a row) waits until a court case is actually filed through the attorney.

As I said, you can't change how people will act. All you can do is be resolute in adopting and following the procedures.

SharonW3 (North Carolina)
Posts: 30

Posted:

We had this issue for years and came up with a solution. At 90 days, we call the owner to a hearing for unpaid assessments. Within 3 days a Notice of Determination from the hearing is sent giving them 10 days to bring the account current or have their water disconnected (water is part of our assessments). If they do not call to make arrangements to pay, we turn the water off after 14 days. We went the lien/foreclosure route before coming up with this solution. If they aren't paying the HOA they're probably behind with the mortgage and it becomes a toss up as to who gets paid. The mortgage company can call you at dinner time and at work and usually is given priority. Not being able to shower or to flush gets immediate attention. We are in compliance with our documents & state law which is imperative. We are consistent and that has really been helpful. After a year of following thru we have successfully cut our delinquency rate way down. People know they can reach out anytime if they need to make payment arrangements. The BOD is compassionate and fair; we'd rather work with someone than turn the water off.

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