HOA Member refusing to pay dues

Hi,

We have an HOA member who refuses to pay their HOA dues. The dues are $150 a month, and they are now 13 months behind. We are only a 4 house community, and we need them to participate in order to keep utilities in the common area going. We have dipped into our reserve to cover what we can while we try to get them to pay their dues, and now our reserve is getting low.

What are some of the options we have to force this member to pay their dues?

Marida,

At this point in time, if they don't want to pay assessments, then legal action is the only recourse.
Move quickly as there may be a time frame for filing a lien.

We've been taking so long to pursue it legally because everything we ask they would pay something. But, I am now the new president of this HOA and I am giving them a final notice then we will pursue with legal action if the fees are not paid in full in 5 business days.

I have a letter written out, does anyone mind reading it and giving some feedback?

Dear Homeowner:

Our records indicate that your association fees are 13 months past due for your property located at xxxxxxx. The HOA treasurer have discussed and have provided xxxxxxx. (representative for xxxxxx), the statements on Sun. Feb. 18, 2018 showing the current status of your account. A verbal agreement was made by xxxxxxxxxx that the past due amount will be deposited immediately the following business day on Tues. Feb. 20, 2018 (Mon. Feb. 19, 2018 is a holiday).

Since the deposit has not been made in a timely manner, the HOA ask that you pay the total amount due including any late fees and interest fees, upon receipt of this notice.

If you make the deposit at the local branch please give a copy of the deposit slip to the HOA treasurer.

Please make check payable to: "xxxxxxxxxxxx"

Amount Due: $1,950
Late Fees (10%): $195
Interest Incurred (3%): $58.50
Please pay this amount: $2,203.50

Failure to make payment in full within 5 days from the date of this letter, the HOA will proceed with the association's delinquency policy and turn this account over to the association's attorney. A lien will be filed against your property and begin any legal proceedings. You will be assessed all legal fees and any costs associated with termination fees, activation fees, late fees, and returned check fees of services including but not limited to HOA utilities and maintenance of the common areas as well as any loss of income to any board member having to take time off to tend to this matter.

First bit of advice is stop playing lawyer and turn it over to your lawyer now.

Second bit of advice is drop the last (bold) part of the letter. It is playing lawyer.

Failure to make payment in full within 5 days from the date of this letter, the HOA will proceed with the association's delinquency policy and turn this account over to the association's attorney.

A lien will be filed against your property and begin any legal proceedings. You will be assessed all legal fees and any costs associated with termination fees, activation fees, late fees, and returned check fees of services including but not limited to HOA utilities and maintenance of the common areas as well as any loss of income to any board member having to take time off to tend to this matter.

We really don't have an attorney, and hiring an attorney is way out of our reach financially. Is their a better way to word it? I don't want to play lawyer, I just want to make it firm and make them be responsible for all fees involved.

You may or may not need a lawyer to file a lien. That is up to your state/county. Plus some legal services offer this at a set rate. Send the letter certified. Make sure to put it to the HOA address. IF it comes back to the HOA unopened do NOT open it! Save it for court. Need to keep it unopened to show it's not been accepted/returned upon delivery.

Don't see any issues with sending the certified letter with a timeline to pay in 30 days. I would kind of follow the same protocol one would follow if evicting a tenant. The first notice is the intent of placing a lien. The 2nd notice the actual action of placing the lien. 3rd notice a copy of the lien.

Keep in mind the process takes time to process. As for the common area violations... Your HOA has to establish a "fining schedule" for violations. It can't just arbitrarily pull out a fine/punishment out of the sky. It has to be established and understood by all members what fines are for what violations. Otherwise, it's selective enforcement argument.

Welcome to being President! Best advice: Make the job part of your DNA. Your going to live/breath HOA while you run it. Accept it do not fight it. You will find a balance and calmness if you don't fight within yourself. Follow and read the rules. Bring them to every meeting. Don't answer till the answer can be referenced in the rules. Don't be afraid to delay an answer till it can be fully researched.

You can do this!

That last part in bold isn't gonna fly. You're going to ask a judge to reimburse directors for time spent doing their jobs? Good luck with that. That naivite alone shows that you need an attorney to follow up on the collections/lien/foreclosure procedure. Even if you legally don't need an attorney for this, that statement demonstrates why you should hire one anyway.


Even if an attorney ends up costing you more than the $2,000 you're looking to collect from the delinquent owner, in my opinion you're skating on thin ice if you proceed with this on your own. In the end, you should be able to collect back upir legal costs and fees from the delinquent owner.

Marida,

A lien won't get you the money until the house is sold and it won't make them start paying.

Send the demand letter. I would also take the time to include details of the account (you will need this for the attorney anyway):

Date Assessment Due amount total
Date (payment) amount total
etc.

Personally, I like to wait until the end of the month for payment and specify on the 1st, it will be turned over for collections. Add that any costs of collections (attorney fees, court costs, etc.) will be assessed to them and added to the amount owed.

In this instance, I would allow through March 30th. (gives them time if needed to get the money).

Every Association has one (someone who doesn't pay or doesn't pay on time). It's a shame your association is so small that it's harder to absorb the costs.
You also need to update your collections policy so the issue doesn't take so long.

Informed in writing?

Our policy is notification letters go out at the first of the month:

30 day letter
60 day letter
90 day letter via certified mail and first class mail (as some won't pick up certified mail)
120 day letter advising the issue will be turned over for collections if not paid in full by mm/dd/yyy (end of the month)

Once it's turned over to the attorney, the Association has no further communications with them.

Keep in mind, the attorney will repeat the letter process to make sure all procedures are properly followed.

When you hire an attorney, make sure that you inform them to include the amount of removing a lien and closing the case as part of the legal fees (otherwise the Association may end up paying for them after the issue is resolved).
Keep in mind that you will likely have to pay legal expenses up front and get reimbursed as the account is caught up.

From what you post, I suspect that once the first letter from the attorney shows up the individuals will know your serious and will pay if they are able.

File a lien. It is inexpensive and does not require an attorney, but there are specific procedures that MUST be followed. Take to Small Claim Court. Filing fee is $60.00.

Mar

They have paid $1,450 of $1,950 so I might wait 30 days to see if they catch up.,

Doug,

Easy for a Treasurer to do in a large Association.
Not so easy when it's a small Association (like the OPs - where there is only 4) or if it's a neighbor.

Again, I agree but it can be very difficult when it's someone you see everyday and your name is on the letter.

In my opinion, you should send a letter thanking them for their payment and point out that the partial payment leaves a balance due.

Example:

Dear Mr. & Mrs X,

This is to acknowledge your payment of $xxx.xx received today. Thank you.

With this payment, your account has a balance due of $ xx.xx
Details of your account are on the reverse of this page.

To avoid additional charges, the full amount must be received by mm/dd/yyyy.

Help yourself! The results are two fold. It makes the neighbor realize "it's just what has to be done" and it helps the people taking the actions understand that as well.