Dues not getting paid

Started by CfD • 19 replies • 1748 views

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CfD (Virginia)
Posts: 265

Posted:

Our most recent treasurer's report dated Feb 28 indicated that over 25% of our home owners have not paid their dues, which was due Jan. 1. I think most would agree that is a very, very high percentage which amounts to almost $30,000.

I know what our options are here in Virginia and according to our governing docs. My question is if you were on the board of your HOA, how would you handle this problem?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Our assessments are considered annual but members may pay monthly.

Based on the monthly payments, we do the following:

30 days out - initial notice
60 days out - 2nd notice
90 days out - 3rd notice sent via certified mail
120 days out - 4th notice sent via first class mail
120 days out - Notice of agenda item to consider escalating collection efforts, sent certified mail
After Board meets, attorney sends further notices.

Those who only pay annually may have a different procedure.

JohnB26 (South Carolina)
Posts: 1,001

Posted:

The BOD needs to grow some testosterone producing glands and start collecting.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Cf,

Knowing where you are located, keep in mind that the SERVICEMEMBERS CIVIL RELIEF ACT may come into play more often for your Association than for other Associations.

Remember that often a deployed service member simply may not be aware of the issue. This is where e-mail can be of great assistance.

MarylouA (Arizona)
Posts: 3

Posted:

Are there any privileges you could remove? In our HOA, we maintain the lawns, so after three months in arrears, we do not mow the grass, or seed. Then, we turn them over to the attorney, who only gets paid if we get paid. This option has worked to motivate homeowners to pay their dues before it goes to the attorney, in some cases.

CfD (Virginia)
Posts: 265

Posted:

Sometimes you make me laugh John

KerryL1 (California)
Posts: 14,550

Posted:

We do it about like Tim's HOA does it. We also turn it over to our collection attorneys.

We in a high rise, too, withhold privileges like the gym, pools, party rooms and especially effective in our urban setting, access to Visitor Parking to their guests. But in CA, we must call them to a hearing first, and tun notify them of our decision in writing. That we can remove privileges is in our CC&Rs.

CfD (Virginia)
Posts: 265

Posted:

We have no privileges to withhold.

We split our dues into two 6 month payments, but our declaration is pretty clear. If you are 10 days late on any installment, the entire annual balance becomes due, and of course, there is a variety of legal means we could pursue to collect.

Agree with John on this one. Our board is a bit too complacent dropping the hammer in my opinion. Not suggesting we start going the legal route after 10 days, but certainly believe legal language can be conveyed as soon as 10 days after assessments were due to perhaps nudge people into compliance.

Hear you Tim, but not sure with our HOA that ACT is much of a factor. Agree it is something to pay attention to though.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By CfD on 03/08/2015 6:16 PM

Hear you Tim, but not sure with our HOA that ACT is much of a factor. Agree it is something to pay attention to though.

Depends on how many service members who have purchased in your development.

BTW - you can easily adopt a policy resolution at the Board level to clarify the procedure to be used for collecting assessments. We actually rewrote ours a few years ago and since then, as Treasurer, I simply cite sections of that policy and the CC&Rs when writing the late notice letters.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By CfD on 03/08/2015 1:23 PM
Our most recent treasurer's report dated Feb 28 indicated that over 25% of our home owners have not paid their dues, which was due Jan. 1. I think most would agree that is a very, very high percentage which amounts to almost $30,000.

I know what our options are here in Virginia and according to our governing docs. My question is if you were on the board of your HOA, how would you handle this problem?

You need to review your entire billing and payment process because you are doing something very, very, wrong if one-fourth of your owners are not paying up. Even at the worst of the last recession my association had fewer than 5% delinquents.

Do you send out an invoice? Is the envelope clearly marked that it is an invoice and not another piece of junk mail? Is the due amount clearly stated?

How do you receive payments? By check only? Do you have on-line payment available? Do you take credit cards?

What follow-up did you do when payment was not received? Did you mail out a reminder? Knock on doors?

You wrote, "We split our dues into two 6 month payments, but our declaration is pretty clear. If you are 10 days late on any installment, the entire annual balance becomes due, and of course, there is a variety of legal means we could pursue to collect." How does this policy help you collect by burying the member under a mountain of additional debt?

How much are your annual assessments? Is there anything preventing your association from seeking a monthly or quarterly payment in addition to the annual and semi-annual options?

CfD (Virginia)
Posts: 265

Posted:

Hearing some good suggestions. Is it the opinion of most that more installments = better collection of dues?

Also, do your HOA's have any requirements for directors to be current on their dues to become officers? The members have no way of knowing if the board pays their dues or not.

CyrstalB (Maryland)
Posts: 457

Posted:

Quote:

Posted By JohnB26 on 03/08/2015 2:58 PM
The BOD needs to grow some testosterone producing glands and start collecting.

Not sure if the females on the BOD would appreciate this option. Just saying.

JohnB26 (South Carolina)
Posts: 1,001

Posted:

No ?

Does not an excess of Estrogen create aggression ?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Watch it buddy or you will get the "PMS horns"....

Former HOA President

JohnB26 (South Carolina)
Posts: 1,001

Posted:

aha ~ proof

JohnB26 (South Carolina)
Posts: 1,001

Posted:

Another goodie:

Put it where it will never decompose from exposure to ultra-violet radiation.

(moderator - please delete if I have, again, over-stepped)

DouglasK1 (Florida)
Posts: 2,046

Posted:

Notwithstanding the exciting discussion of gonads and hormones, 25% delinquent is ridiculous. Are many of these long term or mainly a month or two?

Out of 65 homes, I don't think we've ever had more than 4 overdue at a time, and at least 90% of our delinquencies have been homes in foreclosure. Unlike Tim, we don't even send out invoices. We send a couple of rounds of email at the beginning of each year letting owners know quarterly, bi-annual, and annual payment amounts, and reminding them that annual or bi-annual payments reduce the workload on the volunteer board and helps us keep costs low. We send reminder emails to those who haven't yet paid by the 5th, reminding that late fees kick in on the 10th. We send out quarterly emails to those who haven't paid annually, and each quarter we also post a notice on the sign board out front.

Escaped former treasurer and director of a self managed association.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

We instituted a 6 month we liened policy. If you attempted or paid the money owed, we may "forgive" the late fees. However, any legal fees required to file were included. If the person did not attempt to pay in 6 months we put the lien on. After 1 year of a lien, we would evaluate the situation for a foreclosure on that lien.

This subject has been covered numerous times on here and there are some good resources to be found in those other topics. Just try no to re-activate them.

We gave it a year before a foreclosure because by then one can have an idea of what is going on. If they are a service member, then you can NOT foreclose while they are on active duty. I found that after a year of unpaid dues, it's most likely they have not paid their mortgage either. Which means the bank will be foreclosing. You do not want to file on a home that is being foreclosed on as your are doing the bank's work for the most part. Plus your HOA really does NOT want to own this property anyways.

So if your HOA does not institute a collections policy or a late fee penalty, your really doing your HOA a dis-service. Time to pass a rule for collections ASAP. Keep in mind you have to wait till that time period passes as you can't do it erroneously...

Former HOA President

KerryL1 (California)
Posts: 14,550

Posted:

CfD--can you remind us if you're on the board currently?

CfD (Virginia)
Posts: 265

Posted:

Not on board anymore Kerry. All I do now is go to board meetings and try to help the board, but it is usually a waste of my time.

I'm about to post a new topic I could really use your and everyone else's help on.

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