Reporting Overdue Accounts to Credit Bureau

We need to get our severely past due owners motivated to pay their HOA dues. We'd like to report the delinquencies to the 3 major Credit Reporting Agencies, does anyone know if this can be done and how best to handle this?

The HOA is NOT allowed nor has the need for anyone's social security number. That is the typical information that one needs to report to the credit bureaus. HOA's are not one of those that the law requires social security numbers be disclosed to.

Your much better off following your documents which is for lien or foreclosure. A lien is much stronger than a lawsuit or credit reporting. The person can NOT sell their home unless they pay off the lien. Foreclosure are just "stop the bleeding" procedure.

Keep in mind that one can't lien/foreclose in many states for anything but unpaid dues. 1 exception for liens is that if the HOA pays to fix a violation and owner does not pay that bill, then that may be lien. (It's also considered damages). That exception is pretty rare and used instead of fines.

I do not recommend a HOA reporting overdue dues to the credit bureau as a practice of collection or intimidation to pay. Too many factors involved. Institute a policy instead of if you don't pay in this X amount of time, we lien. Still don't pay we consider a foreclosure.

It can be done and is done, without social security numbers!

I would send them one last notice, via certified and first class mail (as certified mail is not always claimed), giving them until mm/dd/yyyy to pay up or the Association will turn the issue over to the attorney for collection effort and, if needed foreclosure. Remind them that if this happens, in addition to late fees, they will be responsible for all legal fees and court costs.

Then FOLLOW THROUGH

My Board members and I are meeting with an attorney tomorrow morning about possibly foreclosing on a property for unpaid assessments. I'll post what i learn soon.

We did a foreclosure. It's not that expensive ($800) for the paperwork. Which is additional expense added to what is owed the HOA. You can add on a certain amount of interest as well. Which that amount is usually in your CC&R's or Articles. So know what additional costs can add-on.

Will tell you the process does take 3 - 6 months. Ads have to run in a public newspaper (or public resource) for that amount of time. Which is also in addition to the certified letters sent to the home. Make sure you send a notification to the HOA address and one to the owner if they live off-site. These expenses are also part of the foreclosure add-ons.

Remember a foreclosure is ONLY a "Stop bleeding" measure. It's NOT a profit maker. Understand that this home can stay empty for up to a year after the foreclosure. Each state has a "right of redemption" period that can go up to a year. So the new owners can't really touch the property till that process has completed.

Never foreclose on a house that the bank is foreclosing on. (It should be in the newspaper too). Plus if you know the owner is just going to let the house go, find as many possible interested parties to show up on bidding day. The 1st bid goes to the HOA for $1 over what is owed. The HOA does NOT want to own the property. So I highly recommend to make sure it sells.

Oops, although the second link is a correct link, it has the wrong title.

here is the correct link and title:

Court of Appeals rules that Nevada HOA liens do not supersede first mortgages
Older version of state's laws ruled unconstitutional

Thank you for the input, yes we have to deal with Nevada laws. We are in a odd situation here, these are owners of vacant lots (not a house to foreclose on) in our association that are seriously past due. These are investment lots that were never developed and the owners do not live here, in fact many are out of state mailing addresses. So, if we foreclose we are not able to sell without quiet title action and pay lawyer fees. There is no motivation from the owners that they are going to lose there "house", so we are hoping that a bad credit rating will effect them and motivate them to pay what they owe.

I generally believe a foreclosure is the last step and rarely works out well for an association. That said, if vacant lots I would probably go after them in a New Your minute.

BS!

I signed the form when I bought the house. I had a good realtor that informed of the HOA and got me a copy of the CC&R's. I'm not going to post the document I signed, but it said that I acknowledged the HOA and had received the documents.

I get a lot of weird requests from realtors. The last one was wanting a "Well Agreement". Yea, since the home is on a well and the well is not owned by the seller, they want a Well Agreement. The Well is owned by a water company!

The Statute:

https://www.azleg.gov/ars/33/01806.htm

(a) (3) (H)
A statement that provides "I hereby acknowledge that the declaration, bylaws and rules of the association constitute a contract between the association and me (the purchaser). By signing this statement, I acknowledge that I have read and understand the association's contract with me (the purchaser). I also understand that as a matter of Arizona law, if I fail to pay my association assessments, the association may foreclose on my property." The statement shall also include a signature line for the purchaser and shall be returned to the association within fourteen calendar days.