Questions to ask Management Co. & Lawyers

Started by MC4 • 4 replies • 2011 views

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MC4 (Florida)
Posts: 29

Posted:

We are a new Board, we have about a 40% deliquency rate in HOA dues. We will be meeting with the attorney and the management company to what has been going on and what action have they taken to try to collect this money. What has been your experiences? What questions, should we be asking?

TimB4 (Tennessee)
Posts: 21,060

Posted:

I would ask if, based on what has been presented, the Association has been following the policies required by the governing documents and State law in attempting to collect the assessments and what other steps should the Association be taking.

I would ask, what other avenues are available to the Association other then foreclosure (garnishing of wages, collecting from renters, etc.) and how to legally go about that?

RogerB (Colorado)
Posts: 5,067

Posted:

MC4, First I would review the HOA's current Rules and Regulations (Policies and Procedures) has established and provided to all members. Then before incurring legal expenses the Board should meet and obtain historical information from past Board members and the managing agent. Whoever is in charge of collecting delinquent accunts should be providing a monthly aged accounts receivable report with the status of the larger delinquent accounts.

A 40% delinquency rate indicates to me that major changes need to be established by the Board. If your managing agent is not qualified to provide that guidance, and based on results it appears they may not be, then an attorney could be used to assist in establishing better collection procedures. But, be aware that the object of some attornies may be to increase their income via HOA collections. Some of the policies I have reviewed which were written solely by the HOA attorney focus mainly on their legal procedures and do not communicate effectively with the homeowner.

MC4 (Florida)
Posts: 29

Posted:

We dont have an independent attorney, based on what we examing. The attorney responds more to the management company than to us. Should we have our own independent attorney. Our documents state that we must have a yearly audit. I have yet to see those reports. They claim that the handle the accounting. Should this be? The bottom line, is that the management company is in control of everything, not sure if its a good thing or bad.

TimB4 (Tennessee)
Posts: 21,060

Posted:

The management company only has as much authority as the Board gave it.

The lawyer may be the Association lawyer but speaking with the MC as your representative. If you prefer this doesn't happen, instruct the lawyer not to respond to any inquires from the MC. IF the lawyer rebuffs this notion, thank them for their time and find a new attorney.

The MC might indeed have full control over the finances. In my opinion, shame on them that gave them that power. The MC might even have internal accountants that perform the audits. If no report has been given and they don't want to give them to you, I would first consult with an attorney and then show up on the door of the MC informing them that you are here to collect the Association records. It is not a request for the records, you are collecting property that belongs to the Association. DO NOT PROVIDE WARNING THAT YOU WILL DO THIS - but that is why I also said to consult with an attorney.

Tim

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