How to Collect Delinquent HOA Dues
The issue of how to collect delinquent HOA dues is somewhat common. Once a member of a homeowners association defaults on the association payments, the board members of the association have a fiduciary role in putting the interests of the association first. It is thus vital to know how to collect the dues since refusing to do so goes against your duty to the HOA.
How to Collect Delinquent HOA Dues — What to Do
Continue reading to find out some of the alternatives you have once a member of your HOA is defaulting their payments:
1. Give Them Reminders and Offer Them a Grace Period
Extending the individual an acceptable grace period for them to continue with payment of their dues can save you and your staff a lot of time and effort in tracking down the defaulters. In case you have faithful clients who always make late payments due to unreliable sources of income, you can create plans of payment within reason. Always ensure that you send them a reminder as well as a notice to every member to avoid situations of people claiming bias in the future.
2. Payment Policies
If your defaulter has a temporary hardship, the best thing to do is create a suitable payment policy. The whole idea is to offer the members the right amount of time to make payment and, at the same time, protect the interests of the association by avoiding any legal action. Payment plans will also ignite homeowners to pay their dues since it may even affect their credit scores.
3. Modus Operandi
For cases that have already been agreed upon by the board of directors but is not particularly covered by payment policies, you must be very careful in following the HOA’s procedures. If you miss following any step within the process may delay the time you are supposed to collect or, at times, result in foreclosure. You do not want to offer a defaulter an opportunity to take an actionable complaint against you or lose the chance to conduct future collections.
4. Special Valuations
Issues become more difficult once the board has to enforce a special assessment due to an accidental breach in the insurance coverage or because the cash was insufficient to cater for needs. People usually do not budget for particular valuations; therefore, if your board effects one, you should expect several individuals who will be very unhappy, for they will have to write a check for whatever reason.
More Serious Alternatives to Employ on Defaulters
Bringing in a lawyer — Upon the cases not being covered by a payment plan, and it is necessary to follow the protocol; you may have to involve a lawyer.
Filing a lien — This is significantly cheaper as compared to trying to garnish earnings. Wage garnishment lawsuits are usually more expensive; therefore, it should be among the last options.
Limit access — Revoking one’s rights to utilize the common areas like pools or tennis courts, even for tenants, will frequently force the defaulter to find a way to pay their dues.
Bottom Line
With the above options, you definitely know how to collect delinquent HOA dues. Make sure to go through the process to ultimately enforce stricter options for when your members continue to not pay their dues.
