Annual HOA Dues Collection

Question:
May a board of directors (of a Florida HOA) offer “alternate arrangements” to homeowners for payment of annual dues? ...Or for past delinquent dues?

Our latest invoice for 2014 annual dues included the following note: “The annual assessment for 2014 of $230 is due by January 1, 2014 and will be considered late after January 31, 2014. If payment of your dues by this date will represent a hardship, please contact us to discuss an alternate payment arrangement.”

Additionally, we have several homeowners which have not paid dues in up to 4 years. Our BOD recently sent a collection notice to the delinquent owners stating “if you cannot make the payment for past dues in full, please contact us to discuss an alternate payment arrangement”.

Our HOA By-Laws state the following regarding collection of annual dues:

Section 2. Duties of the Board of Directors. It shall be the duty of the Board of Directors to:
(1) Fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period;
(2) Send written notice of each assessment to every Owner subject thereto at least thirty (30) days in advance of each annual assessment period; and
(3) Foreclose the lien against any property for which assessments are not paid within thirty (30) days after due date and/or to bring an action at law against the owner personally obligated to pay the

ASSESSMENTS
Each member is obligated to pay to the Association annual and special assessments which are secured by a continuing lien upon the property against which the assessment is made. Any assessments which are not paid when due shall be delinquent. If the assessment is not paid within thirty (30) days after the due date, the assessment shall bear interest from the date of delinquency at the rate of six percent (6%) per annum, and the Association may bring an action at law against the owner personally obligated to pay the same or foreclose the lien against the property, and interest, costs, and reasonable attorneys’ fees of any such action shall be added to the amount of such assessment. No Owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the Common Area or abandonment of his Lot.

Do all offers need to be applied equally to all members...If they offer one member a quarterly payment plan, are they not obligated to offer the same plan to everyone?

Also...The board is offering these individual alternate payment arrangements following discussions by email (presumably including a quorum of board members) without holding an open board meeting. Does the Florida statute requiring that all meetings involving a quorum of board members be open to all members and properly announced apply to this issue? May any HOA business be conducted and/or decisions be made by the members of the board by privately emailing each other?

Would you not have to waive the late fees for everyone? …And allow everyone to pay installments. We have 44 homes…so quarterly payments could result in a maximum of 176 payments. What is then to prevent members from making monthly payments?, which could result in up to 528 checks coming in constantly.

Also, what are your thoughts about the board discussing and approving these payment plans during private email meetings, rather than in open pre-announced board meetings?

Depends on the situation.

Typically, delinquent accounts would qualify for executive session.
Typically, executive session must be entered from and return into an open meeting.

If the issue can't wait for a meeting, then I think it would be ok to use e-mail and handle it as an action without a meeting. However, if it can wait and the Board simply doesn't want to meet in person or deal with the potential drama of a meeting with the owner over the issue, I believe that the Board would be in violation of any open meeting laws the State may have.

Yes, the Board can offer alternative payment plans. However, if they choose to do so, a part of the agreement should be that the deal is off if the homeowner misses a payment. Otherwise, you could have a homeowner play around for a lot longer (ie oops I missed a payment last month, here is a payment for this month, oops next month I am short again).

One thing every Board should have is a uniform collection procedure and a uniform process for alternative payment plans. That keeps it fair to all homeowners.

Our BOD has a history of selective enforcement regarding dues collection. They had gone for many years allowing several owners to remain years delinquent with no consequence. Even some board members were up to a year late paying dues. In 2007 there were two homeowners that sent notice to the board that they would not pay until the board took control of the dues collection issue. The board responded by immediately turning those two owners over to a collection attorney and caused them to pay over $260 in additional fees. Since then, the board has allowed over half of the homeowners to go up to four years without paying dues. At one point we had over $15,000 in uncollected dues. The same board has not held open board meetings or provided income and expense reports since 2006. A recent election re-elected most of the previous board members to the board. I believe that this new effort to offer easier payment opportunities is simply a way to further soften collection effort that has been virtually non-existent for almost seven years.

…There it is JohnC46…I look forward to see how you will defend the my BOD and their CAM after hearing the whole ugly truth. I say this because my BOD and CAM seem to be doing everything they can think of to circumvent the By-Laws and the FL statutes…and every time I ask for advice from this forum, it seems that everyone here offers nothing but unconditional defense for their every violation of the FL statutes and By-laws. Yoyu seem to have trouble admitting that some BODs and CAMs have serious problems. No bad it seems to be there is awalys a good excuse for their failures.

The Florida statutes (720.303) require HOAs to provide all members with access to the records only excluding private information such as bank account and ID numbers and attorney/client protected info. The FL statutes do not exclude sharing collection account collection information…Meaning that the FL statutes do give homeowners the right to know the collection details of other members HOA fees. Also, is seems that the collection decisions made by the BOD should be considered HOA business and thus be subject to the open, pre-announced meetings rule. The BOD should not have the power to waive one member’s late fees while not waiving another member’s late fees…would this not be selective enforcement of the dues collection rules in the By-Laws?

JohnC46,
You are correct concerning the intent of my question. My problem is that most of my neighbors are happy with the board because they are unlikely to enforce collection on most members. It is clearly unfair (and likely illegal) that dues payment is strictly enforced on only 20% of our members.

Our CAM complies with records requests only because he knows that some members will report him to FL DBPR if he does not. Therefore, I receive regular updates of the delinquent list, which I have regularly posted on a blog since 2010. But this has had little or no effect on the BOD’s behavior or on the delinquent members. The “alternate arrangements” line was a new addition to the annual dues invoice that I believe is just a new way to forgive delinquency rather than to decrease it.

FOX

Nothing personal but quite often it is easy to see when someone is asking a question but their issue is not really the question, as was yours. If you have been blogging about it for 4 years why now be asking questions? Meaning you made up your mind 4 years ago.

Asking for advice is good, but asking others to confirm what one has already done is not asking for advice. It is asking for agreement/approval of what they have already done.

I agree that there is the propensity for HOA Boards in Florida to become shady in spite of the "Sunshine State Laws". In any case, yes, it is a Board's fiduciary duty to collect assessments. 44 lots x $230 annually = $10,120. I guess my question is what does your HOA do with such a small amount of money? I can't imagine your HOA has enough to pay an attorney for collections.

Yes and no.

The Attorney may insist that the Association pays for legal fees up front and those costs will then be added to the amount being collected from the owner in order to reimburse the Association for costs of collection.

The Attorney may simply take the case on contingency.

It depends on the attorney, the relationship they have with the Association and the strength of the case.