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When some owners don't pay special assessment

Started by EmmaC • 28 replies • 1381 views

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EmmaC (Florida)
Posts: 12
Posted:
I'm just curious, what is the normal action for the Board to take in this situation?

In my community when some balked at paying the assessment for new fence, the board simply decided to just not install the new fencing on those lots where money wasn't paid. However that didn't exactly help the beautification of our community because now are large gaps in front of those houses where fencing should be.

Is it more the norm to file a lawsuit against the offender in this situation?

MelissaP1 (Alabama)
Posts: 13,836
Posted:
Lawsuit bad idea... The option your HOA has is to file a lien for that special assessment. A special assessment works just like your paying dues. The difference is that it is "Special" because it is voted on to be a special dues assessment to cover a "project". Those who did not pay the assessment can have a lien filed to collect it. They will have to pay not only the special assessment but the cost of filing the lien to collect.

The HOA can offer a "grace period" to avoid the extra expense of filing a lien. The cost of which varies in your specific area. Can go upwards to $500 and need a lawyer. It is a good idea when you are doing a special assessment to add a bit of a "buffer" to assume worst case scenerio of the collections if people do not pay. Which can be 10% of the special assessment goes toward.
Former HOA President
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By EmmaC on 12/04/2023 2:53 PM
I'm just curious, what is the normal action for the Board to take in this situation?

In my community when some balked at paying the assessment for new fence, the board simply decided to just not install the new fencing on those lots where money wasn't paid.
This article describes how the Board should aggressively pursue payment of a special assessment:

https://www.sarasotamagazine.com/home-and-real-estate/an-unlikely-heroine-steps-in-to-save-crumbling-dolphin-tower

But I doubt your board is smart enough or dedicated enough to understand any of what is described in the article.
TimB4 (Tennessee)
Posts: 21,044
Posted:
Once a special assessment has been adopted, the Association should consider it like the annual assessment and follow the proper procedures for non-payment.

Typically, this includes:

1. Informal Notice
2. Written Notice
3. Formal notice (typically sent via traceable means)
4. Hearing before the Board to consider turning the issue over to collections
5. Perfecting the lien along with proper procedure for legal/foreclosure action
6. Worst case - foreclosure
JackieB4 (California)
Posts: 398
Posted:
Tim, I appreciate your consistency with simplifying the process. 1=6,voila!! Thanks so much!
KerryL1 (California)
Posts: 14,550
Posted:
I think you wrote elsewhere that the HOA has control" of the fences. Does that mean the fences are "common area" property? What do your documents say, probably your CC&Rs?

If they are common area the Association via the Board has an obligation to repair and replace them. In fact, the Board's main job is to maintain repair and replace the common areas. By letting them fail, be unsightly in appearance and perhaps be hazardous (danger of falling over??) the Board is NOT acting in the best interests of the association.

The trouble is, no one is forcing them to do their job., so they do nothing.

When is your HOA's annual meeting and election? At least one or two of them will be up for election, right? Vote them out! But the the hard part is to get owners to be interested and and to find enough to work with you to campaign to elect another or others (whom you also must find). So if you really have no neighbors or friends who are owners, it's going to be very difficult to throw the bums out.

Many are NOT comfortable with this but it takes going door-to-door with flyers and naming some improvements you seek. "I'm ready to be proud of our neighborhood. Are you? Let's get together at xx, on xx a xx to share ideas." Even if you get only a few positive responses, that is ALL you need. But you & other must be willing to work hard to get candidates and to get out the vote.

Meanwhile the Board should be taking the steps Tim lists per your documents and FL statutes.

(Is it possible Elle cited the wrong article? I don't see any help for Emma in it)

EmmaC (Florida)
Posts: 12
Posted:
Yes, the fences are common area property. The HOA was supposed to maintain them -- not homeowners' responsibility.

MelissaP1 (Alabama)
Posts: 13,836
Posted:
At this point if the HOA can not afford it, then why not homeowners responsibility? The difference between having the HOA pay for stuff and the owners is that it is ALL the HOA members who pay for that one thing versus the ok ne owner. Do you want a bulk payment or pay individually? Many people would say they are not happy to pay more to fix someone else's fence. Hence why a special assessment will fail. It may be time HOA approves fences than own them.
Former HOA President
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By KerryL1 on 12/04/2023 6:05 PM

(Is it possible Elle cited the wrong article?
The article explains how to get people to pay for Special Assessments, responding to this point made by the OP:
Quote:
Posted By EmmaC
In my community when some balked at paying the assessment for new fence, the board simply decided to just not install the new fencing on those lots where money wasn't paid.
TimB4 (Tennessee)
Posts: 21,044
Posted:
Quote:
Posted By MelissaP1 on 12/05/2023 5:37 AM
At this point if the HOA can not afford it, then why not homeowners responsibility?

I would expect that this change would require amending documents.
EmmaC (Florida)
Posts: 12
Posted:
Thanks for the responses.

Is it normal for homeowners to balk at ANY kind of assessment or increase?

The Board increased the monthly dues by $10 after not increasing it for several years. Many of the homeowners screamed bloody murder at this increase. And when it came time for the special assessment for the fence ($400), several people balked and simply didn't pay the assessment.

I didn't think either increase was surprising, or out of line. There are many communities in florida facing much bigger assessments right now due to insurance issues.

I'm starting to feel like a lot of homeowners in my HOA are either poor, or completely disconnected from economic realities.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By EmmaC on 12/05/2023 2:27 PM
Thanks for the responses.

Is it normal for homeowners to balk at ANY kind of assessment or increase?

The Board increased the monthly dues by $10 after not increasing it for several years. Many of the homeowners screamed bloody murder at this increase. And when it came time for the special assessment for the fence ($400), several people balked and simply didn't pay the assessment.

I didn't think either increase was surprising, or out of line. There are many communities in florida facing much bigger assessments right now due to insurance issues.

I'm starting to feel like a lot of homeowners in my HOA are either poor, or completely disconnected from economic realities.

Usually disconnected.
KerryL1 (California)
Posts: 14,550
Posted:
In my opinion, the "offender" is the Board itself. They ARE NOT repairing the common areas. They are not fining owners who're behind in their assessments. Wait, doesn't your HOA, Emma, have a Schedule of Fines? Don't your CC&Rs say what the penalty is for delinquencies?

Say, what size is your HOA? Your Board?

This situation is an excellent example of the the wise use of a Town Hall informational and educational meeting. All Owners are invited and directors generally sit among them. A director might host the meeting. The fence expert gives a presentations about the status of the fencing, why it must be replaced, etc. Owners ask questions and honest answers are provided. Someone, perhaps the PM take noes about theQ &A, presentations, etc.

Instead of just posting these notes, or actual minutes, they should be e-blasted to all owners.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Emma
If a Special Assessment was passed then go after those not paying as if they were not paying their Annual Assessment (Dues). It is the same thing/procedure.

DeanJ
Posts: 1,786
Posted:
I’d have an attorney send the Board a letter advising unless the dead beats are required to pay up his client is filing a fair housing complaint for discrimination.
ElleN (Idaho)
Posts: 4,420
Posted:
Quote:
Posted By DeanJ on 12/12/2023 11:53 PM
I’d have an attorney send the Board a letter advising unless the dead beats are required to pay up his client is filing a fair housing complaint for discrimination.
?

The Fair Housing Act prohibits only discrimination that is based on an owner's membership in one of the protected classes (race, religion, national origin, sex, disability, familial status and a few more). This is not the case here.

You need to stop posting about the Fair Housing Act. Or keep posting, and I will point out your gross errors time and again.
MikeB23 (Louisiana)
Posts: 109
Posted:
We have an owner who refused to pay special assessments and dues.

He was notified of the delinquency by Certified Mail, Return Receipt. He refuses all Certified Mail, not just ours and has multiple lens on various properties.

We successfully sued and he still wouldn't pay. We were progressing with law suit to take his unit as payment and the Bank holding his mortgage stepped in and paid his past due amounts.

Above times two. He to this day refuses to pay dues or special assessments. After we finally file suit, the Bank pays back due amount but hasn't paid the Court Costs or Laywer's fees.

We just won an injunction to close the businesses rents to, closing their business. He will then lose his income and we will do what is legally required to acquire his unit and sell it. Or, maybe he will pay. Who knows?
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Why did you sue. Bad idea. Should foreclosed as long as they are not behind on their mortgage. Bank gets money first no matter if HOA forecloses. Let bank foreclose and keep a lien for back dues.
Former HOA President
MelissaP1 (Alabama)
Posts: 13,836
Posted:
Why did you sue. Bad idea. Should foreclosed as long as they are not behind on their mortgage. Bank gets money first no matter if HOA forecloses. Let bank foreclose and keep a lien for back dues.
Former HOA President
TimB4 (Tennessee)
Posts: 21,044
Posted:
The lien and foreclosure process varies by State. Some States do not require the courts and some do.
Check the process for your State to be sure.

Why foreclose?

Although it's highly possible that the Association will obtain little money from a foreclosure, a foreclosure may be in the best interest of the Association in order to stop the bleeding (so to speak).

If the Association went through the legal process of getting a judgement for the debt owed, there are then other options then foreclosure. These can include garnishment of wages or bank accounts.

see: What is a judgment? from the consumer financial protection bureau

Again, processes vary by State.
MikeB23 (Louisiana)
Posts: 109
Posted:
Have two lawyers on the Board and a real estate lawyer working on the case.

You are correct, laws in every State vary. We are doing what we can do in Louisiana. If we foreclose we would be last in line anyway and wouldn't get any money at all.
MikeB23 (Louisiana)
Posts: 109
Posted:
Quote:
Posted By MelissaP1 on 12/28/2023 5:00 PM
Why did you sue. Bad idea. Should foreclosed as long as they are not behind on their mortgage. Bank gets money first no matter if HOA forecloses. Let bank foreclose and keep a lien for back dues.

Then we get little or no money. We have had a lien on the property for a decade. The injunction closing the businesses is our best bet. He will then have to start paying or lose his tenants. Several people wanting to buy his place, but he won't sell.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
At some point it is not about the money but stopping the bleeding. Which is all a foreclosure does. Plus a foreclosure stops as soon as the amount owed is paid.

I say time to go with foreclosure process. Your state may have a redemption period up to a year after foreclosing. Meaning the owner can pay back what they owe plus some expenses to get home back.

Your HOA is not doing itself any favors by using or keeping a lien at this point. Time to foreclose and hope new owners pay their dues.
Former HOA President
ChristineS7 (Minnesota)
Posts: 58
Posted:
This is helpful. Thank you.
ChristineS7 (Minnesota)
Posts: 58
Posted:
The HOA has a responsibility to maintain them, but the HOMEOWNERS HAVE A RESPONSIBILTY TO PAY FOR THEM!!
ChristineS7 (Minnesota)
Posts: 58
Posted:
The HOA has a responsibility to maintain them, but the HOMEOWNERS HAVE A RESPONSIBILTY TO PAY FOR THEM!!
MikeB23 (Louisiana)
Posts: 109
Posted:
Quote:
Posted By MelissaP1 on 01/04/2024 9:56 PM
At some point it is not about the money but stopping the bleeding. Which is all a foreclosure does. Plus a foreclosure stops as soon as the amount owed is paid.

I say time to go with foreclosure process. Your state may have a redemption period up to a year after foreclosing. Meaning the owner can pay back what they owe plus some expenses to get home back.

Your HOA is not doing itself any favors by using or keeping a lien at this point. Time to foreclose and hope new owners pay their dues.

As long as the Bank pays up when we start proceedings we are bleeding any money, just a colossal pain in the ass.

This owner has multiple liens against him from the IRS, right on down the line.

Our goal is just to get our money.
MikeB23 (Louisiana)
Posts: 109
Posted:
Quote:
Posted By MelissaP1 on 01/04/2024 9:56 PM
At some point it is not about the money but stopping the bleeding. Which is all a foreclosure does. Plus a foreclosure stops as soon as the amount owed is paid.

I say time to go with foreclosure process. Your state may have a redemption period up to a year after foreclosing. Meaning the owner can pay back what they owe plus some expenses to get home back.

Your HOA is not doing itself any favors by using or keeping a lien at this point. Time to foreclose and hope new owners pay their dues.

As long as the Bank pays up when we start proceedings we are bleeding any money, just a colossal pain in the ass.

This owner has multiple liens against him from the IRS, right on down the line.

Our goal is just to get our money.

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