JohnB64
Posts: 8
Posts: 8
Posted:
My hoa is just comming out of a financial hole i want to help them get the rest of their late payments from residents because they dont have enough money to maintain the community to well how can i help them?
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Helping my HOA
Started by JohnB64 • 8 replies • 1977 views
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MelissaP1 (Alabama)
Posts: 13,734
Posts: 13,734
Posted:
File liens and maybe raise assessments. We had a 6 month behind we liened policy. Establishing a policy helps so you are not randomly liening. It is all in your documents on how to do this. read them.
Former HOA President
CarolR11
Posts: 2,560
Posts: 2,560
Posted:
JohnB64, It doesn't sound like you're on the Board of Directors, right? So, attend board meetings and ask directors what you can do to help. If your HOA has a Finance Committee, perhaps you'd like to join it.
KevinK7 (Florida)
Posts: 1,326
Posts: 1,326
Posted:
I say the biggest thing is to make cuts to any non-essential services.
My neighborhood dealt with some financial problems because of a lawsuit. At the meeting they mentioned they were running out of cash. The problem was nobody was willing to make any decisions. They pre-paid pest control for a couple cul-de-sacs and entrance ways at a huge rate because they were getting a discount. They felt that was a priority because of the discount. They didn't want to cancel yard service for some grassy patches that equaled less then a quarter acre because they believed it was important. They refused to shorten the amount of time the entrance way light was on because they felt it would be an "invitation to criminals," despite there being county street lights 10 feet from the entrance and about one every couple of houses. They wanted to INCREASE the off-duty policeman to patrol. They wanted to continue running water for their cul-de-sacs where they planted non-native water intensive grasses and plants because they spent the money on them. All this when membership dropped by over half (effectively halving operating cash) and they had to hire a new attorney, costing thousands of dollars.
The problem is you have to make the difficult decisions in order to make things work. Look at your finances and really ask yourself if it is an expense that is necessary. Also avoid any commitments that again are not necessary. Don't pre-pay pest control for a couple planters if you know you are on shaky ground.
My neighborhood dealt with some financial problems because of a lawsuit. At the meeting they mentioned they were running out of cash. The problem was nobody was willing to make any decisions. They pre-paid pest control for a couple cul-de-sacs and entrance ways at a huge rate because they were getting a discount. They felt that was a priority because of the discount. They didn't want to cancel yard service for some grassy patches that equaled less then a quarter acre because they believed it was important. They refused to shorten the amount of time the entrance way light was on because they felt it would be an "invitation to criminals," despite there being county street lights 10 feet from the entrance and about one every couple of houses. They wanted to INCREASE the off-duty policeman to patrol. They wanted to continue running water for their cul-de-sacs where they planted non-native water intensive grasses and plants because they spent the money on them. All this when membership dropped by over half (effectively halving operating cash) and they had to hire a new attorney, costing thousands of dollars.
The problem is you have to make the difficult decisions in order to make things work. Look at your finances and really ask yourself if it is an expense that is necessary. Also avoid any commitments that again are not necessary. Don't pre-pay pest control for a couple planters if you know you are on shaky ground.
MelissaP1 (Alabama)
Posts: 13,734
Posts: 13,734
Posted:
Above all else keep in mind that a HOA is ONLY funded by it's owner's FOR it's owners. So if you want out of this hole, ALL of your members will have to chip in.
Former HOA President
SheliaH (Indiana)
Posts: 6,967
Posts: 6,967
Posted:
I'd like to know how your HOA has managed to get out of the financial hole because my HOA is still struggling with this!
But as others have said, you and the homeowners will have to determine what services they're willing to pay for and go on from there. Remember some expenses are for things the homeowners can't "see", like property taxes for the common areas, legal fees (to go after the people who won't pay!), association insurance, etc. You won't be able to get rid of those things because it's the law and if your HOA is set up as a non-profit corporation, there are things you must do to stay legal and the IRS off your tail.
Your budget should have a bad debt line item because there will probably be some people you'll never collect from (foreclosure, bankruptcy, etc.) Make sure you have a good collection policy and use it. It's also helpful to review the policy with your attorney and property manager to see if it needs to be tweaked to make it more effective.
But as others have said, you and the homeowners will have to determine what services they're willing to pay for and go on from there. Remember some expenses are for things the homeowners can't "see", like property taxes for the common areas, legal fees (to go after the people who won't pay!), association insurance, etc. You won't be able to get rid of those things because it's the law and if your HOA is set up as a non-profit corporation, there are things you must do to stay legal and the IRS off your tail.
Your budget should have a bad debt line item because there will probably be some people you'll never collect from (foreclosure, bankruptcy, etc.) Make sure you have a good collection policy and use it. It's also helpful to review the policy with your attorney and property manager to see if it needs to be tweaked to make it more effective.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
JohnC46 (South Carolina)
Posts: 14,230
Posts: 14,230
Posted:
John
I would say the 1st attempt at collecting back dues should be a friendly, polite, we want to help work this out approach. A payment schedule, maybe dropping some late fees, etc.
The 2nd approach should be less gentle like a threat to turn it over to a law firm. Not a collection firm which is a whole other subject.
The 3rd approach should be a letter from the legal firm outlinging what they will be going do unless back dues are paid.
Hope this helps.
I would say the 1st attempt at collecting back dues should be a friendly, polite, we want to help work this out approach. A payment schedule, maybe dropping some late fees, etc.
The 2nd approach should be less gentle like a threat to turn it over to a law firm. Not a collection firm which is a whole other subject.
The 3rd approach should be a letter from the legal firm outlinging what they will be going do unless back dues are paid.
Hope this helps.
BB7
Posts: 23
Posts: 23
Posted:
Hey Johnb64 MYOB that's just what every HOA needs someone running around trying to HELP THE ASSOCIATION !!!!!
BrianB10
Posts: 24
Posts: 24
Posted:
As a full time property manager for many years, I can tell you what worked for me...
1)First a nice letter, as others have mentioned...
2)The delinquent notice which states exactly what legal options the association has. In most cases this involves the placing of a lien and handing the account over to an attorney for collections.
3)FILE THE LIEN...
4)ENFORCE THE LIEN.... a lien is worthless if the board will not unanimously vote to enforce liens.
I know this seems harsh, but as a manager one of our number one goals was to get delinquent accounts performing again and if that meant foreclosure and the bank taking the property back over then that was it. Most reasonable folks who care will respond to point #1. For the others you have to force their hand.
1)First a nice letter, as others have mentioned...
2)The delinquent notice which states exactly what legal options the association has. In most cases this involves the placing of a lien and handing the account over to an attorney for collections.
3)FILE THE LIEN...
4)ENFORCE THE LIEN.... a lien is worthless if the board will not unanimously vote to enforce liens.
I know this seems harsh, but as a manager one of our number one goals was to get delinquent accounts performing again and if that meant foreclosure and the bank taking the property back over then that was it. Most reasonable folks who care will respond to point #1. For the others you have to force their hand.
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