HOA Collection attempts

Started by TiffanyO • 13 replies • 2856 views

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TiffanyO (Louisiana)
Posts: 2

Posted:

Hello, I am Treasurer of a small HOA in Louisiana. We have made multiple attemps to collect dues from our members and we are ready to turn it over to someone else to aid in our collections. The attorney that we used to help with our by-laws now wants a hefty retainer when we only have approximately $2,800 in dues outstanding (for the past two years). Does anyone have any recommendations regarding using a lawyer versus a collection agency. I have not been able to find any local collection agencies who are willing to collect HOA dues!

Thank you!!

SusanW1 (Michigan)
Posts: 5,202

Posted:

What has your HOA done to collect these past due accounts?
Have you placed leins on the homes?
In Michigan, you don't need a lawyer to do that.

$2800 is not a large amount of $, but it may be all relative to your budget.

What is your size and what is your annual budget?

GlenL (Ohio)
Posts: 5,491

Posted:

We use an attorney who specializes in collections and all of his fees are passed on to the delinquent homeowner.

Studies show that 5 out of 4 people have problems with fractions

PetunkaM (Florida)
Posts: 1,009

Posted:

Quote:

Posted By GlenL on 08/02/2011 3:47 PM
We use an attorney who specializes in collections and all of his fees are passed on to the delinquent homeowner.

A quick note, how many fees has the attorney collected and what was the net to the Association? Just curious.

JamesC (Maryland)
Posts: 282

Posted:

TiffanyO

Our attorneys are constantly going after delinquent homeowners by filing liens, garnishing salaries when they learn their place of employment, and in some instances they work with the homeowner with payment plans.
Employees seldom appreciate their employers being told they are not reliable when it comes to paying their bills.
Your attorney should not be requesting retainers since he would get his fees if he does a good job collecting what the homeowners owe to your HOA.
Our Association carries close to $30,000 in deliquencies, and the Attorneys fees are added to the account of the delinquent homeowner.
They have recovered thousands of dollars in back fees, and we have never had to foreclose on a homeowner. (YET)

Good luck:

Jim

JamesC (Maryland)
Posts: 282

Posted:

Forgot to mention: From what I understand collection agencies want at least 30% of what you are owed as their fee.

Jim

TiffanyO (Louisiana)
Posts: 2

Posted:

Our HOA only consists of 106 homes and our dues are $100 annually. We have hand delivered letters, sent certified letters, and our President has gone door to door of those who are still deliquent. I just don't know that we can justify the cost of an attorney to file liens for $2,800! But then again, it's a bad precedent to set to NOT file liens. What incentive do people have to pay their dues if there is no legal ramification.

For those of you who use attorneys for liens, can you please explain the fee structure they charge? Our attorney wants us to guarantee him $3,000 in business a year. Which is 1/3 of our revenue! That's absurd.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Call the courthouse and see what they charge. It's not always necessary to have a lawyer file the lien in every state. I would ask that as well. The HOA does get any legal costs refunded when the lien is paid off. It's part of the lien settlement. Which is why lawyer charge such ridicolous amounts to do them. They know whatever they charge (within reason) can be reimbursed once the lien ever gets paid off. Which as everyone knows can take years...

I believe it cost us about 400 dollars per lien. That was using a lawyer. However, our state I believe doesn't require an attorney and the cost is much more minimal for filing costs. Some states allow something called a "Super Lien" which is a much stronger lien. It doesn't wash out as easily during foreclosures. Not sure what the costs are associated with that or if those do require attorneys. They are worth the effort in extreme cases.

Former HOA President

PetunkaM (Florida)
Posts: 1,009

Posted:

Tiffany,

Melissa covered it. Florida, for instance does not require an attorney to file a lien either. The process is a little time consuming but easy. Also, I find real estate attorneys much less expensive than HOAs attorney. May be you contact a few to see what their terms are?

PS: I cannot find HOA statutes for Louisiana on line to see if it addresses procedures for filing liens?

CharlesP7 (Louisiana)
Posts: 15

Posted:

Tiffany,

What did you end up doing, if anything? My HOA Board, in Louisiana, has been operating in a hands-off method for 7 years then started to file liens on properties. Now we come to the close of the 5 year lien and we are trying to figure out if we should renew the lien, foreclose, or something else. Thanks for any insight.

SheliaH (Indiana)
Posts: 6,964

Posted:

This is an old conversation and what applied in 2011 may not be the case today. You may want to ask your question by starting a new topic.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

TimB4 (Tennessee)
Posts: 21,059

Posted:

Charles,

If it were me, I'd renew and foreclose (keep in mind, all the member has to do to stop it is pay the assessment, late charges, court costs and legal fees).

Once the membership sees that the Association means business, the other delinquent accounts will likely be calling to set up a payment plan.

DouglasM6 (Arizona)
Posts: 724

Posted:

Go to the court and learn how to file a suit against them yourselves, as a Board. do it quickly, and do not offer any discussion about it with the delinguent members, assuming they have been sent proper notices in the past.

As mentioned earlier, once the they served and sued, they will start paying.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By GlenL on 08/02/2011 3:47 PM
We use an attorney who specializes in collections and all of his fees are passed on to the delinquent homeowner.

Same here.

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