Past due HOA fees.

I am that lucky person who is an HOA president. Woo hoo! Power, prestige and all that! This property was built in 1981 and the number of units is 62. The dues are arount $130 a month and the projected monthly income is $8060.

There are four units that are just not paying dues.

A-Two are behind for $3800.
B-One is for $2530.
C-One is for $1330.

The total is now around $11,500.

We do not charge late fees. By our CCRs they can only be $5.00 per month, having been set at that level back in 1981. We do not insist that the management company keep up with the $5 bookkeeping involved since the most that can be charged per year per unit is $60...and at that low amount, it is hardly worth having to sort out late fees vs. fees if legal action has to be taken. No...I think if the facts are reviewed they are pretty much in the favor of the HOA as far as being fair on fees. We don't fine and we don't penalize.

Last year, for the "A" units above, a lien was recorded in the county records for the (then current past due) amount of around $2500 each.

In one of the A units, a woman lives there who has been unemployed for about 18 months of the past two years. But, her history has always been that paying her dues was hit or miss--however, over the last 20 years that she has lived here she has obviously paid for the most part...as it was convenient. In the past two plus years she has not paid at all...not even $25 a month...nothing.

In the other A unit, the guy has never paid a nickle. Mr. A has very little equity in his house--probably not enough to collect the dues, if my calculations are right.

The B unit has never paid for the last two years they have lived here.

The C unit is just usually $400 behind...I was shocked when I had the management company send me a report at my request and they were up to the $1200 mark.

The CCRs allow for the following remedies: (1) removal of voting priveleges, (2) Liens recorded, and/or(3)a "foreclosure" wherein the HOA forces the sale, pays the lender (if any), collects the dues, plus attorney fees and cost of collection, and if there is any cash left after the legal fees and costs of the sale involved, the owner gets the balance.

I'm not eager to force a sale for obvious reasons.

However, we just had our property management company send a letter to our four telling them to clear up their account before 8/23 or we would consult an attorney shortly thereafter...and if the advice was that foreclosure was in the best interest of the entire community then we would be forced to pursue it.

Well, of course, we don't want to go that route, but payment plans have been repeatedly offered and there seems to be no interest in working at reconciling the balance.

In the past, another one of our owners had financial problems, but after she righted herself, she paid $50-$100 a month on her $1000 past due amount until it was paid off.

Liens for the uncovered (by liens) past due amounts will be recorded, for sure, after the 23rd if no response.

Other than this, do any of you know of any type of motivation for these people? The sense of entitlement that the non-payers seem to enjoy is, oh so, annoying.

Brenda

I'll own it, Mary. Love your bluntness. I've been a board member and the HOA president for 15 months and it's time to attack this as a high priority.

I'm going to take your recommendations to the board this month. Thank you for taking the time to write it out there for me.

I think the stance of "there's a new sheriff in town" must be adopted. Before I moved here in 2005, our board was not active. Until last May (09) and prior to that, for years, a nice, popular lady who did not live on the property or own it managed/ran the property, kept the appearance looking great so everyone was happy and collected board member opinions when necessary!

The late fees were not taken care of then, and when this board organized and got busy, the $5 was not nearly as important to start and deal with as our other issues at hand. Having most of those dealt with at this point, or at least down to a dull roar, I wholly agree with you that not paying dues must begin to feel painful to the one who does not pay.

You are right about the burden. As a member, I am more than p*ss*d off. This must be stopped. Last year, our membership voted that at $5000 in past dues a foreclosure must begin. I've recently taken an anonymous survey using surveymonkey.com and members are saying now at $1000, $3500 and then some of them say NEVER. Of course, we know who those are. I think members are right there with me.

Your policy, or something just as painful and similar, will be adopted.

John, I definitely like the reporting to credit agencies. I know that people use HOA fees as a piggy bank...or a good many do. This would also motivate.

Thanks, John.

Mary - No, you're great. I am so enjoying talking to people who understand my issues.

Our current attorney is great at the mechanics of HOAs. But, foreclosures and past dues...not so much. I used to work for him. We did liens, we told HO's if they could not do something and they would not listen to PM, that sort of thing... but we never got into the business of collections or foreclosure work for our PM. That's just not his firm's thing. And, frankly, we were the firm on the beginning of the condo property. We created their documents, and then usually the developer also became the PM. So, I have a lot of experience with much of the HOA stuff, but not with the dirtier side. I will solicit our attorney's advice on taking that next step to find a good attorney that won't be afraid to demand and collect. He would do it, but it is not his thing. He will be glad I won't ask him. I do have to say, though, for guidance on the CCRs, he is without a doubt, the most qualified in this area.

I guess with my background with CCRs and HOA functions and working with property management companies on their HO issues, its easy to see how I got myself into this pickle. I also made the mistake one day of checking the corporation's status on the Secretary of State's website....to assure our HOA corpoation was still in good standing...and it was NOT. That's when I knew I needed to step in and try to pull a real board back on their feet. I was able to fix a lot of things that would have cost a ton of attorney's fees that were unnecessary since I could do it. I had to reinstate the corporation before we could record a lien. With no corporate standing, we could not "bring suit".

I would love to turn loose of this monkey, but I can't. It's either motor on through or sell my home and move. Oh yeah, and our management company has never managed a condo association before! They are into rentals. Thats the company our former manager-lady went to and then put us with. Wow. It was awful! But, they have gone from being totally useless except for paying bills and sending statements to being pretty darn good and eager to learn. They will do whatever I ask and they are very responsive to me...they don't hop for the HOs until it's clear with me, and that's as it should be right now. They communicate with me a lot if anything odd comes up that we have not dealt with before. Maybe there is a better PM out there for us, but while we are trying to figure out where we are, I feel more comfortable with a devil that I know than the devil I don't know.

AND, when I got started at this, the manager-lady had never consulted an attorney! Never! Oh my goodness. I can't believe that...I don't know how you do without an attorney. Obviously, never was a lien recorded on her watch. It just goes on and on.

Thanks again for your great input.

brenda