Letter informing member of filing with Magistrate Court for payment of past dues.

The board is taking action against homeowners that have excessive amount of past dues owed. Over $1,000. We have hired someone to file in magistrate court but need to send homeowner letters giving them one more chance to pay up, offering a repayment plan, or face a court case. Would like some help with the letter to homeowners about the pending litigation. Thanks

What notices have you sent in the past? If there have been past notices why would more do the trick?

Filing a lawsuit should never be the first step in collection but at some point you need to stop horsing around. If you have already sent out more than two notices to each delinquent owner and received no response it is probably time to file with the court. Nothing gets someone's attention quicker than a process server knocking on the door with a summons and complaint.

As far as a letter, try this:

"Dear [homeowner]:

"Our records indicate that you owe [the association] $x,xxx.xx. We have previously attempted to collect this from you without success. We have engaged an attorney to file a lawsuit against you to secure a judgment for the amount due. We will seek not only the amount due but we will also seek a judgment for all of our costs in bringing the lawsuit.

"We are hereby offering you this opportunity to avoid this lawsuit by making reasonable arrangements to pay the amount due. If we have not heard from you by [date] we will proceed with the lawsuit.

"Please contact [person] at [phone, address, or e-mail] to make arrangements."

joan

I am not nor do I play a lawyer.

Typically the steps to collect unpaid dues are:

1. Begging and/or threatening letters. Larry posted a good threatening one.

2. Filing a lien on the property. If same in GA as in SC, this can be done without the need of a lawyer.

3. One starts a foreclosure. This is a legal mine field and should not be done without legal advise and typically is not worth it to do.

Sorry to say but one has to accept that you will never get all owed from everybody no matter how done. I am not saying do not try but there comes a point it might no be worth it.

We handle the issue as follows:

We have tried several ways to collect back dues in that we talk to people, try and arrange payment plans, waive late fees, etc. but it gets to a point where they ignore us or do not honor their promises. We felt that by this time we had no "weight" with them so we needed an alternative with more teeth in it.

We use a real estate law firm that has a division within it that specializes in owner associations. They use a multi step process to collect. To the best of my recollection it works like this:

1. Our first attempts are to collect any owed money ourselves so after 30 and 60 days late, we send polite letters from the HOA even offering to make payment arrangements.

In the next quarterly bill, the HOA sends notice reminding the owner they are 90 days late and asks for back and present dues or a payment schedule acceptable to the HOA within 30 days or we will turn the account over to a law firm for collection. It is now almost 150 days since we have seen a payment. If no arrangements are made, we send it on to the law firm.

2. The law firm sends a letter informing the homeowner that they have received the case and are prepared to file a lien and commence to foreclose unless owed dues are paid and/or a payment schedule is arranged with the HOA within 30 days. The firm charges the HOA $65.00 for this letter.

The law/collection firm then backs off and awaits further notification from the BOD. It is now back in the BOD's lap. The BOD then tries once again to reach an agreement. In several cases the letter from the lawyers was enough for owners to make arrangements to pay. If no arrangements are made we turn it back over to the law/collection firm again. We control the timing of when we turn it back over to the law firm.

3. Law/collection firm sends a letter saying a lien has been filed (which it has) and foreclosure has commenced. It will now cost the homeowner $495.00 (to the law firm) plus owed dues to the HOA to stop the process. There is no charge to the HOA but the homeowner must pay the $495.00 to the law firm and back dues to the HOA to be current.

4. If no response within 60 days, the law/collection firm files some paperwork with the court about foreclosure and notifies the homeowner that foreclosure has begun and it will cost $995.00 (to the law firm) plus back dues to the HOA to stop the process.

5. The next step would be the HOA pays the law firm $400.00 and foreclosure commences. The process is completely stoppable at this point by the HOA, the HOA would still have a lien, and the law/collection firm is owed $995.00

We do not want to be in the real estate business and we have no wish nor desire to foreclose. I am not saying all should not foreclose but our decision is not to and as such, we have not gone past Step 3. I advise we never do.

We are running about 3-5% in overdue dues we expect we will never collect on.

Hope this helps.