HOA dissolving

I was on our Board for five years. I resigned in June. I noticed a street light had been out for weeks and the area very dark. So I asked a Board member about it and was told it isn't getting fixed because the HOA doesn't have the money...only $600 in checking. I don't know what is in the CDs.

Anyway I called the management company and was told this is due to foreclosures and 2/3 of the homeowners not paying their dues. She said it is too expensive to take them to small claims and that our covenants (written in 81) forgave past dues when a house went into foreclosure. Then she said the HOA will most likely dissolve. This means our neighborhood will go into further decline.

Is anyone else experiencing the foreclosure crisis in their communities. Is there a way to collect dues without going to court? When I was on the board we tried letter after letter, and then a letter from our lawyer. Some people paid up. Others have not. I was so frustrated and stressed that I had to step down.

susan, Is the street a dedicated public right of way? If it is then your city or county would maintain all the streets and lights etc. What does your plat of your subdivision say? check on the first sheet of your plat. It should tell you if the streets are public or not then you will know if the streets are public right of way or part of private development. FYI JerrellC Florida

We have the same problem and the letter writing did nothing. We have taken many to court and emptied our bank account and still owed 30,000 dollars. The foreclosures have not stopped yet. Yes we collected alot of money by taking owners to court but not near enough to make it worth while.

PauG,

While it's true some delinquent members will pay up, especially after receiving a demand letter from an attorney, there will always be some who won't no matter what you do to collect. But, with a 2/3 delinquency rate I have to wonder what your collection policy states and even if the board is being deligent in enforcing it to the letter. I also wonder why assessments have not been increased to preclude depleting your operating account. Perhaps the assn needs more than a stricter collection policy; perhaps a new board is in order, although it may even be too late for that!.

I know some communities have been hit harder than others with foreclosures. Oftentimes the HOA is not paid which puts a larger burden on the members who are paying. But, in order to keep the HOA solvent the only recourse is to keep increasing assessments. The prudent board will also put a "bad debt" line item into the budget to account for the uncollectible assessments. But, the board should not wait until their operating account is so low that it would be impossible to increase assessments to make up for the shortfall,as in the case of your BOD by letting the operating account fall to only $600.

As for the HOA not having the $$$ to pay for an attorney to collect the delinquencies, some attorneys will bill the delinquent member directly for the fees.