Member Questioning Annual Assessment

Here is the situation...

I am the treasurer/manager of the day-to-day operations of my HOA. We currently have 180 residents, and will grow to around 380 once the development is complete. We have lot owners that originally purchased lots several years ago with the intention of building custom homes. However, a large developer in our state has bought out just about all of the lots from the original developer. Consequently, these owners are sitting on lots that will never sell for anywhere near what they paid, so they are holding out for more money from the current developer. The developer was the BOD until May 2015 in which they turned it over to the residents. However, we started officially collecting dues in January 2015. Our assessments are sent out bi-annually. The developer previously put a management company in place, which we terminated this month due to budget and performance issues.

The management company sent out all invoices last year, and were actually sending invoices to the vacant lots to the actual lots. Of course, these lots have no mailboxes, so the mail would have had to have been returned to the company, including the certified intent to lien letters that were sent out. Never once did they attempt to verify the addresses on our assessor's website, which I did upon termination. I was then able to send out the letters to the correct addresses for the owners, and have had a few responses, and they had no idea that anything was due.

One particular owner feels that we should write-off his 2015 balance. His argument is that it should not be due as he was not informed about it until now. While I sympathize with him and understand that it is not fun to get hit with such a large bill, as a board we cannot justify writing off the balance. However, I have agreed to write-off the late fees and all accrued interest, as well as work out a payment plan. He still does not feel that it is fair, and has even said that he might consult his attorney.

Has anyone else ever run into this type of issue? I realize that rules differ from state to state, but am just looking for general advice. All of the lots in the subdivision fall under the HOA, and none are exempt.

Very impressed with what you have done so far. Good for you.

If as you say, the HOA is mandatory for all lots, then so are the fees.

Your CC&Rs establish the obligation to pay - not the sending of an invoice.

You might want to tell him that under his deed restrictions, he must pay his proportionate share. The HOA does not have the authority to waive his fees because that would force the other lotowners to make up the difference and pay more than their fair share.

It's not uncommon for a lotowner to threaten that he will consult a lawyer. Few people go that far.

If things remain amicable you don't have to say anything more. Send your certified notices as appropriate. But if the dialog starts to degrade, you can let him know that the deed restrictions allow you to charge him for your legal fees and costs to collect.

Of course, you should read your docs to make sure what I'm saying is accurate.

Best of luck.

With NPS on this. My docs say that assessments are due whether the owner is notified or not.

He had an obligation to pay. If he wanted an invoice he should have kept the association informed of his mailing address. If he thinks waiving the late fees is not fair then reinstate the fees and cut him no slack.

Encourage him to consult his attorney. Let him pay your fees plus the attorney's fees and then ask him if your are being fair.

Sending HOA mail into the "abyss" is common, especially with investment properties or foreclosed units in mature neighborhoods.

You are correct to remove all fees and charges associated with the miscommunication. No, the HOA should not waive HOA assessments due to miscommunication. Every property owner agreed to pay dues when they bought their land. They opted-in.

Well said.

A questions - did the HOA exist when they purchased their lots? If there was no HOA in place at the time, then the are grandfathered into not being a part of it, unless they make the option to be a part.