Board Member on payment plan in good standing?

The subject asks my question: Is a board member who is on a "payment plan" considered to be in "good standing?" I have found no case law but many corporations that allow for this.

Alfred Vail Mutual Association
NEW JERSEY'S LONGEST RUNNING CO-OP

"If Member is not in good standing due to non-payment, Members may change the status to good standing by paying the arrears in-full or by making a payment plan approved by Board, at Board’s discretion."

CALSouth
Official Youth and Adult State Soccer Associaiton for Southern California

"Cal South Good Standing Policy

A. Good Standing An Affiliate Member of Cal South shall be deemed to be in Good Standing as a Member if:

Financial An Affiliate Member’s financial liability to Cal South cannot exceed $1,000 and reach 60 days aged, or have any balance reach 90 days aged. The only valid exception to these criteria is a written and signed payment plan provided and agreed to by the respective District Commissioner and approved by the Cal South Board of Directors."

Michigan Education Association

"MEA will consider a member to be in good standing if he or she is making payments for the current year and is complying with a payment plan for dues owed from prior years."

I would rather have someone on a payment plan than someone NOT paying at all. It shows someone is making an effort to pay. So why would you have an issue with someone on a payment plan? Everyone has hit hard times. Especially those who just went through the government shutdown. It seems having a payment plan set up is the most considerable thing to do for someone in a HOA.

Is this just a reason not to like this board member or have something to wag the tongue about? Otherwise, a person who is TRYING to fulfill their debt is a good person to me.

Unless your Bylaws are more specific than “in good standing,” I think the member on an agreed to payment plan is in good standing.

I believe Bylaws should have this phrase, or something like it.

Sheila,

I like that more complete and unarguable definition!

I dunno, John ...

"Current with all fees ..." to me means everything is paid, not agreed-to-be-paid at some particular future time.

I understand there are differing opinions. Does anyone know the case law that addresses this issue?

That would depend on the state – if you say you’ve heard different opinions on good standing from various attorneys and property managers, what do you think you’ll get when you start comparing lawsuits from several states all heard by different judges?!

You and Melissa both have valid points regarding payment plans. Board members aren't perfect, but the best leaders set a good example - at least try to behave like the type of homeowner you want to live in your community. People who pay assessments in full and on time, keep their homes and yards in order and try to get along with the neighbors (most of the time) would be a good foundation.

I can only think of one board member during my 10 year tenure who went delinquent, but she left the board shortly before things went truly haywire (major illness followed by job loss).That was why, as former Board treasurer, I was always willing to consider a payment plan to at least keep some money coming in, get some money in. I also expected people to be straight with the board as to why they couldn’t pay. I realize it’s scary and embarrassing to say you need help, but a good HOA board recognizes that life happens to everyone at a time when you least expect it. It’s when people blew off the gentle reminders, followed by the not so nice letters and the pay or else, letters, we were less inclined to consider them, especially after the account went to the attorney.

As far as credit checks are concerned for potential board members, I’d extend that to potential homeowners because that’s where HOA board members come from. I know there are several reasons that may never happen, but I still think banks and mortgage should do a better job in considering all the costs of home ownership when reviewing mortgage applications, including HOA assessments.

Better yet, I’d like them included with the mortgage payment because I’ve seen far too many cases where someone goes into foreclosure and everyone else, except the HOA ends up walking away. Maybe if all the costs were considered, banks wouldn’t put homeowners in mortgages even Ray Charles could see they couldn’t afford. It might even encourage people to do some more research before they buy so they know what they’re getting into.

It's a great clause to have - if (1) homeowners are aware of it and (2) banks abide by it. Activating that clause was one reason we eventually changed association attorneys because the previous law firm didn't seem to be aware of it (they were nice people, but their approach to collections wasn't as aggressive as we felt it should be, considering what we were paying out in legal fees!).

However, we found that it was very difficult to find out who the hell had the mortgage because it had been sold and resold and re-re sold. Then you had to figure out which department to send the information to, which led to another round of "this isn't my department, you need to go to...." Just as we zeroed in on who was responsible, the bank would then decide to do its own foreclosure, but would file the papers and sit and sit (and not pay a dime in assessments), until they managed to get someone to buy it for whatever they could sell it for, which usually wasn't enough to pay off our lien and so the association would have to eat the debt.