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Posted By SusanM28 on 10/14/2017 1:35 PM
Many thanks to both KerryL1 and SheilaH for your responses. You have both offered sensible suggestions.
Yes, I am on the HOA Board of Directors. I am asking these questions because I take my fiduciary duties and responsibilities to all of our community home owners very seriously and want to ensure that our Board follows the "straight and narrow" as well.
To try to answer your question, PMC was engaged in trying to obtain collections from delinquent owners vs. an HOA collections attorney. The PMC is contracted by a multitude of HOAs in this area. I do not know which one(s)is/are affected by the PMC's actions. Our HOA is actively seeking payment for delinquent accounts. I am wondering at this point if our current HOA delinquencies are being pursued in the appropriate legal manner. We have received no info whatsoever from the PMC regarding the lawsuit or communication as to whether our HOA's pursuit of collections was/was not involved.
That may be an issue because your board should already have a handle on how delinquencies are being handled instead of leaving everything to the management company (something far too many associations do because it's easier, I guess). In our association, our management company primary responsibility regarding delinquencies was to send out late notices - no response after 60 days, it went to our association attorney. There was a time where the property manager would get bankruptcy notices and the collections department manager would ask the attorney not to make an appearance on our behalf. He meant well, as some of those notices were for chapter 7 and we'd likely eat the account anyway, so he wanted to save us some money. We stopped that because it didn't cost us that much for the attorney to make an appearance, and as treasurer, I wanted to be sure if there were ANY assets available, the association could at least try to get some money back.
Sometimes people would call the management company and ask for a payment plan - the company used to set those up, but we stopped that too, saying the Board was to review and approve all payment plans. We made that change in our collection policy which is sent every year to homeowners along with the upcoming year's budget. We wanted approval because we found some accounts were sending in $50 or less on delinquent accounts of several hundred dollars and it was taking too long for them to pay off (even then, people would still default).
We were fortunate in that our management company was well acquainted with the Fair Credit Reporting Act and Fair Debt Collections Act so they wouldn't do anything stupid, but we also got fairly detailed notes on each account every month with the management report. I'd review those notes and if anything looked weird, I'd ask for clarification, and if we needed to fix something quickly, we would do it. Our association attorney has a background in collections so he helped us evaluate our collection policy every year (as we evaluated his firm's performance in collecting).
THAT'S how you keep track of who's doing what - it's not about micromanaging, but educating yourself on what you can and can't do, along with the people you pay to do the dirty work. Earlier I mentioned the Community Association Institute - it has several brochures and books on collections for HOAs you can use to evaluate your own collections - I suggest your group get a few copies and read them so you won't be so dependent on the property manager. Remember they work for you, not the other way around.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius