Grievance from past HOA and unpaid dues

Hello, I recently posted regarding unpaid dues and got some great guidance here so I am hoping for some insight again. I have recently become the president of our homeowner's association. We have homeowners that have not paid their dues in over 4 years. We are working on these unpaid accounts and making some headway. Obviously there are reasons that people have not paid and in our attempt to contact some of those we have heard from one homeowner with some strong feelings.

The homeowner has emailed to tell the reason they have not paid is because of issues that happened in the past with the HOA and the builder. Their defense is that for one, our HOA did not have a full board for about 4 years. We only had a president and a treasurer. The CC&R's state that the HOA will consist of 5 board members. Also our homeowner's association had not renewed their business entity with the state of Tennessee since 2000 but we have recently reinstated and paid all our fees current for each year to become reinstated as an active business entity with the state of TN. Because we did not have all of our officers and were not registered with the State of TN, some homeowners are saying that they will not pay dues for those years because "we were not a legal HOA". Is this a valid point?? Can they do that??

Also this homeowner says they paid $150 to an attorney years ago to fight the builder that would not turn over a common area to the HOA. She says that the HOA then did not support her in the fight with the builder. From the story I've gotten they used to be very involved in the neighborhood and the association but feels that somewhere along the way the HOA did not support her or her property. She also doesn't trust now that the HOA (which now has a full board) will support her property. But we have nothing to fight about at this point. We just paved a private road in our neighborhood that the HOA should have done 14 years ago. I don't think she sees that as support to the homeowners or their property.

Lastly she does mention that she feels "very uneasy joining the HOA and expecting it to protect the land which we all have deeds to. I could protest in many ways..bringing down the value of all concerned...but felt that holding back dues to cover the payment to the lawyer...and further issues the HOA is unwilling to support is the best way." For one, our HOA is not voluntary or optional. I wonder what your advice is to handle this situation. We do not have an attorney for our HOA, but I am beginning to think we may need one for situations such as this one. Any insight out there on these issues? Our biggest concern as an HOA is collecting the dues and of course building a sense of community and bringing the people together.
Thanks for your help!
Ellora

Ellora, none of the listed reasons are a valid reason for not paying assessments.
1. An HOA does not have to have a full Board so long as there is a valid attempt to fill vacancies.
2. I doubt that TN requires your HOA to be incorporated.
3. The $150 paid to an attorney was her choice and unless authorized by the Board the HOA has no obligation.
4. All members can have concerns and have the opportunity to work on correcting their concerns.

I like your approach of trying to bring the neighhood together. Listen to her concerns, but be firm on collecting all delinquent accounts in a fair and equitable manner.

Ellora,

This homeowner, and any others who aren't paying because of "issues" with whatever or whoever, need to understand that no matter what they don't like about the HOA and what their issues may be with the builder (who is no longer there!), the ARC, etc have no effect on paying the assessment. Each member is obligated to pay the assessment -- PERIOD. If they don't pay, explain to her exactly what will happen, with foreclosure being the last resort, to collect. Then start sending the past due notices, with appropriate late fees, rebilling fees, demand fees, attorney fees, etc. Follow your collection policy to the letter. Don't let any member sway you with their sob stories about why they aren't paying. Unless a member's reason for not paying is financial in nature, they really have no valid reason for not paying and they need to understand this. The fact that the BOD has allowed this member to get away with not paying for 4 years is mindboggling and tells me one of two things: 1) the board is afraid to exert their authority (they want to be nice guys and not anger anyone!), or 2) the board doesn't understand the members' obligation to pay assessments. Either way, perhaps these people should not be serving on the board, but of course that is a whole different issue.

The board can work with a member who is having financial difficulties by offering a payment plan and/or waiving late fees.

BTW, the fact that the HOA did not file an annual report and may have been administratively dissolved doesn't mean they could not continue to operate as an HOA and is certainly not a reason to stop paying assessments. An administrative dissolution is oftentimes meaningless; it all depends upon the state. Also the fact that the board consists of less than the required number of members is also meaningless. However when there are vacancies on the board that cannot be filled through election then the board should try to make appointments to fill the open seats. I'm sure your bylaws provide for this. I know that sometimes a person will be willing to take an appointment but that same person would never consider running for a board position.