Collection Agencies for HOAs

Your going about it the wrong way by hiring those type of lawyers. That is NOT how you collect dues money owed. You hire a lawyer or a legal service to file a lien at the court house. The legal costs are part of the lien that has to be paid in addition to the dues owed. A lien stays on the home till it sells. Later you can then foreclose on that lien to "stop the bleeding". You do not need to file a lawsuit to collect. A lawsuit the person doesn't have anything holding their feet to the ground like a lien.

Notice I said "DUES". You can't lien/foreclose for fines in many states. I would also recommend making a collection rule. Ours is 6 months behind we liened. 1 year + we CONSIDERED a foreclosure. Foreclosure ONLY stops the bleeding and is NOT a money making action. It just gets rid of the non-payer in hopes of replacing them with a new owner that does pay dues.

Again NOT a collection agency. You need to find a lawyer to file one IF needed in your area. Ask the courthouse what their process is for filing a lien. Probably probate court? A legal service may be able to do it which can find in a phone book. They basically are like the "nurse practicioner" of lawyers.

In states, where it is prohibited to lean for fines, and a homeowner does not pay a fine after 6 months, what appropriate measures should an HOA/management company take?

Some CC&R's prohibit those who have outstanding fines or who are in arrears on their dues from voting in an HOA election. Can an HOA prohibit a homeowner with outstanding fines from running for the Board?

Kat

There are Collections Agencies an HOA can hire to collect debts but typically the HOA sees very little of the money, so few do it.

The typical way an HOA operates when one is behind in dues/assessments is to file a lien against the property. This lien must be paid before one could sell their property. It varies on who can file the lien. In some jurisdictions it can be filed by an Officer of the HOA. In other jurisdictions it must be filed by an attorney. In either case, any charges for such can be added to the amount due. Aslo late penalties can be added. Refer to your docs for amounts.

One could also foreclose on the property but this can be time consuming, costly, and in many cases not worth it especially if the owner is deep in debt.

Usual procedure is:

1. Polite note/reminder from the HOA when 2-3 months behind.
2. Nastier letter from the association threatening legal action when 4-5 months behind.
3. Letter threatening legal action from an attorney when 6 months behind. They usually charge about $150 for this letter.
4. 30 to 60 days later, the attorney places a lien on the property and informs them foreclosure will commence. This is usually a $400 charge.
5. Attorney begins foreclosure. This can get expensive in like several thousands of dollars.