The HOA’s collection process has been reviewed and structured by attorneys who specialize in HOA collections. Because of the harsh consequences for violating one of the vast and complicated collection statutes, this approved collection process is necessary to protect all parties.
One of the many challenges of being on a HOA board of directors is membership delinquencies. While everyone wants to be fair and consistent with all delinquent members, questions do sometimes arise from boards about what more can be done to collect delinquent assessments or, on the other extreme, boards ask “can we be neighborly in our collection efforts.”
When it comes to what more can be done, we are often asked about practices from bygone years that were very effective in collecting delinquent dues such as posting delinquency lists. In the past it was common practice in some HOAs to post delinquencies in membership newsletters and even on the entrance signs to the community. While extremely effective in the collection of delinquent assessments, it is possibly in violation of Federal and state statutes.
We are sometimes asked if we can be more neighborly by calling the delinquent member, or by going by and speaking with them at their home. The primary reason that this is not feasible is that speaking directly with delinquent members provides no proof that the delinquent member was informed of their rights under any collection statutes. The burden of proof on proper notification generally falls back on the party collecting the debt.
Collection attorneys specializing in HOA collections have written the communications that our client association use. In practice, communications initiated by the party owed money or working on collections for that party must follow specific communication legal protocols. We are occasionally contacted by board members who ask if the collection letters can be written ‘friendlier’ and less legalistic. They many times feel that a softer collection letter would be received better by the delinquent member. The fact being the collection attorneys have structured these letters to comply with any collection statutes.
To sum up the words of a long serving board president: “these collection laws weren’t meant to protect the people owed money, they are written to protect people who owe the HOA money.”
The most distressing realization about collections is that all parties lose; the delinquent member has to pay late fees, and in some instance’s legal fees, and possibly lose their home. The board of directors and our company lose time and effort collecting those delinquent assessments when that energy could be applied to other constructive activities that are more beneficial to the entire HOA.
William Douglas Management, providing excellent management services to HOAs and condominium associations since 1980.
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