Hardship case to avoid collections

Jane,
IMHO it appears the decision has been made for you if she is selling her place. Before she can sell she would be obligated to pay her assessment, which means with money from the sale. You can dun her to death but as they say, "You can't get blood from a turnip."
You hired the management co to do this kind of thing. I would have to let them handle it.
We all feel for this kind of situation because of how scary it would be for us to be in same position and someday we might.
The Management Co. might be talked into talking to her and trying to get her to make lower payments until house is sold, but they would be obligated to try and collect full amount and it seems in this case that would take place at the sale. Our docs. state settlement has to be made at time of sale, you may require a lien, again, let the MC do it.

Here is the attachment to my post.

This is a hard situation. Unfornately, the advice isn't goint to be "puppies and sunshine" on this one. Although it would be great for a HOA to decide that it is okay for a person that is seriously in a hardship condition to be "forgiven" for not paying dues, reality doesn't afford that. HOA dues are much like your utility bill, mortgage, or car payments. They don't forgive.

Now there are some options if you have residents willing to pitch in. You can ask other members to donate money to pay this person's dues while they wait to sell the house. That way they won't risk having a lien put on their property and can sell the property. Otherwise the HOA has no choice but to lien for unpaid dues by the time the sale comes up. That's about your best scenerio with being as kind as you can be.

I had a resident who was on disability. They were afforded some discounts or reduced payments to certain bills due to this. However, that "bill forgiveness" did NOT extend into the HOA dues. They had to be paid regardless. I felt bad about it but couldn't legally do anything about it. All we could do is hold off on putting a lien on the property which in turn meant we would never be able to collect that money in the future. The dues would be a loss. We couldn't afford a loss.

I did have a program setup for some people who were behind in dues. At 6 months we liened regardless of the situation. Howevever, I was willing for anyone who was less than 6 months behind to "catch up". They could simply double their payment the next month. If they didn't pay dues in July, then they could "Double" the payment for August and possibly sans late fees. This way they weren't in danger of liening and could keep up with their dues and keep their voting rights.

Sorry for the hardship case. You may have residents willing to help out by donating a small amount to cover dues. Otherwise, you have to follow the rules which don't allow dues forgiveness.

This policy is defective, IMO. Consider the case where all members were 5 months behind. Could the Association operate? I doubt it. You can't have a "policy" that puts the association's solvency at risk.

I'm not sure that our policy is applicable to the people in this forum, as just about everyone in our building is a millionaire. We have strict enforcement. A letter goes out on delinquency, a $25. charge plus 16% interest is charged, the lien process begins at the earliest defined time.

If applicable, I would implement a procedure for applying for a hardship. Its not something that can be devised off the top of one's head. But you cannot have a general policy that allows delinquency over a 6 month period. Your heart is not part of your responsibility; which is to rigorously try to collect dues. If you have to take out a loan to pay the bills because you feel sorry for people then you've failed.

Terribly cold attitude.
Check the CC&Rs, ours contain provisions for board discretion in hardship cases, payment plans, etc. Yours might also.
Jane

What procedure isn't flawed? The policy was in regards to "HARDSHIP" cases ONLY. If I was approached by the person who was behind and they had a true "hardship" temporary situation, then I allowed them to "double up". However, if the case was the owner NEVER responded to notices or refused to pay dues out of "protest" they were NOT allowed to use the "catch-up" process.

Jane:

I would agree, we are all one second from being in a hardship case ourselves. I would hope that my association uses it head but also its heart a little bit if I am in a difficult situation. There is a huge difference between an owner that simply won't pay and an owner that wants to pay but can't at the moment but is making an effort. An experienced board member will recognize the difference, I don't have to explain that to those of you who are experienced in it, it is easy to tell.

Doesn't sound you are talking about liens here? Our association has guidelines set up for collecting, we follow them.

PaulJ: Just how would YOU go about FORCING people who can't pay OUT?
Again, we're not interested in what you don't like. Just post here in your responses what YOU WOULD DO, so we can all learn.

PaulJ: Just what we all thought...a lot of wind and nothing to back it up!

Our "Troll" is back. Just ignore this thing. He's just posting to make people mad. He's not got any true or accurate advice anyways. Never has. So let's try to keep things on the positive. We have enough negative attitudes at home.

Oh wise one please enlighten me. What would you do to a person whose spouse has just died and is the breadwinner? Would you lien on them right away as soon as possible, or would you talk to the person and understand their dynamics? I already know since your association only communicates via website you would lien right away and wouldn't even send notice.

Got it!

Whenever I want!

JaneG - It is neither cold, nor terrible to expect that all owners pay their fare share of the association dues. It is unfair to pass the burden of delinquent accounts to everyone else. While your heart is in the right place, you will have made an exception for someone which may bite you in the end. Since everyone in your association is to be treated equally, what would you do if say 10 owners were delinquent? Unlikely scenario but you never know. Over time, 9 more owners may befall the same situation as the one now in hardship. Especially with all the adjustable rate mortgages now in default. Procedure is to notify the owner of the assessment due with an opportunity to pay, and then place a lien on the property. The lien will have to stand in line because the bank will be paid off first.

It is unwise to have residents help out by donating a small amount to cover dues. First, if the owner defaults all owners will already be donating. Don't tax the good people (that lent a helping hand) twice. Plus an owner's financial matters should not be so easily disclosed to other residents.

HOA fiduciaries have to come to terms with their role as protecting that of the membership at large.

Curious though, approximately how much are we talking about in arrears?

BradP - In your first "breadwinner" scenario, one month grace to pay is acceptable because the assoc. needs to allow time for notification and resolution of arrears which would probably take a month anyway. In your second scenario, I'm inclined to say tough cookies but undecided. Payment plans are OK, better that than having to file a lien. However, an HOA should not get in the habit of becoming a lending institution.

RobertR1 - BradP presented two scenarios and asked for my action to each. My basis for granting an extension for the "breadwinner" scenario is based on the month window of opportunity plus the reasonableness rule that the owner is now a widow and the debt should be paid well prior to the amount of time it will take to file a lien, etc. If you can't decide what you would do in that scenario, that's all fine and good. I can and would justify that reasonable decision to anyone that questioned it. I'm not trying to change anyone's advise to this post.

Joe and BradP,

I have no dissagreement in what each of you say. You both are level headed and make your decision wisely. I certainly didn't mean to imply I am trying to change your convictions.

I am trying to get around when any one of us is charged with making decisions along these lines we have to do what we think is right, but as advice to someone else I don't believe what ever they present on this board is reason for us to change our advice. It may be how we would do it, but I would hesitate in pitting one persons advice against another. Certainly advice is helpful and good advice is even better. In this case we don't even know how much money is involved and that figure is relevant to some other things we don't know.

So if I sounded as if I dispute anyone about this, that was not my purpose. Gods knows I could screw things like this up royally, and have done it, and still believe I was right, but "right" is only part of most problems.