Hoa Late Payment and Attorney Fees

Started by VI • 38 replies • 7590 views

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VI (Texas)
Posts: 3

Posted:

Once homeowner is turned over the an attorney handling collections for late homeowner dues is it out of the HOA managing company and Board of Directors hands to resolve the issue for the homeowner. Do we let the homeowner contact the attorney directly who handling the collections and leave it at that even if a homeowner ask for help from the managing company or the board? Do we have a say as to what the attorney should do in this homeowners case?

NancyD1 (Florida)
Posts: 447

Posted:

We have always worked with the homeowner if he wants to settle, but with the understanding that he will also have to pay any attorney fees that apply to the collection attempts on his account. The attorney has his fees and someone has to pay them. If you are going to settle with the homeowner it should be you who contacts the attorney to stop any further action. You owe the attorney no explanation for the settlement.

The HOA must follow the procedures for collections in your docs or the state guidelines. When an account is handed to an attorney for collections he follows the state law, a certain number of days for a lien, then the same for foreclosure.

VI (Texas)
Posts: 3

Posted:

What if we ask the homeowner to work with the attorney's office. But communication problem occurs between the homeowner and the attorney and the homeowner comes to the HOA management and Board for help in settling. Do we step in to settle with the homeowner or should we just let attorney take care of this issue until payment full payment is received.

Here is an explaination of what happened.

A homeowner did not pay for his HOA dues. After a late payment was sent after 30 days we turned the homeowner over to an attorney for payment.
The attorney added his fees and sent the homeowner a certified letter for the late fee and his charges. The homeowner called and we explain that they did not pay in timeframe per the HOA. So we ask the homeowner to contact the attorney directly to settle the issue. The homeowner contacted the attorney via email in the certified letter that was sent. The attorney did not respond the the homeowners email. So the homeowner called their office to check on how they can settle the issue. The office responds stating that they have to contact the managment company. After a month pass and the attorney had not responded to the homeowner. The homeowner calls back to ask the attorney what is going on. The attorney advises that a letter has been sent out a couple of days back. The homeowner was waiting for the letter but did not received until a week latter. A Certified letter shows up dated the day before it was sent. The homeowner is now asking us to help resolve the issue and sent and email to the board and the managment company.

Should we step in and help the homeowner in this case to resolve the issue.

BradP (Kansas)
Posts: 2,640

Posted:

Here are my thoughts on the situation. First I don't like the fact that you involve attorneys in the collection process because their fees will double or possibly triple what the homeowner already owes and once an attorney is involved it just throws up walls, establishes battle lines and creates an environment of animosity.

I don't know how every state works, I can only speak for mine that it is very simple for the board to place a lien on the home and then before the person can sell they need to settle that lien with the board.

To your question, if the homeowner wants to work with the board I would absolutely let them. If they come forward and show a desire to work it out cut the attorney loose and save them some money. In the end it is all about working together to solve problems.

RogerB (Colorado)
Posts: 5,067

Posted:

VI, I would never refer a delinquent account to an attorney until such time as it needs to go to court. Let your management company work with the homeowner based on your Board established Rules and Regulations on Delinquent Assessments.

MelM (California)
Posts: 4

Posted:

The Attorney fees are the responsibility of the Homeowner now. I think you did move to the attorney too soon, but it should teach the homeowner the lesson of paying on time. We have 1 homeowner who has not paid for 9 months, and the board acted too slowly and is now using a collection agency, which they should have done 6 months ago. Anyway, it will get ugly.

BradP (Kansas)
Posts: 2,640

Posted:

Mel:

Why use a collection agency, why not lien the property?

GloriaM (North Carolina)
Posts: 829

Posted:

VI:

It depends upon your state laws and its collection laws. Here in NC, we are considered a 3rd party once we turn it over to collections. Therefore the attorney can only speak to the HO. That is why we try to work it out before collections takes place.

HaroldS (Arizona)
Posts: 906

Posted:

Remember, if you turn a debt over to a collection agency or an attorney, they will come under the National Fair Debt Collections Act, and must adhere to their rules. Harold

RonaldW (South Carolina)
Posts: 901

Posted:

We have two homeowners who are nine months late paying their assessments. We tried to contact them several times via regular mail, certified mail, and telephone, all without success. We finally turned the matter over to our attorney who has mailed them each a "demand letter" threatening a lien. Attorney costs are about $200.00 each which will be charged to the homeowners in addition to the assessment and interest..

This is not how I would like to treat my neighbors, but my neighbors have ignored and disrespected me and the rest of the members by not paying their fair share of the expenses.

Most people will pay more attention to a letter from an attorney than to one from their HOA.

Ron
SC

RonaldW (South Carolina)
Posts: 901

Posted:

Quote:

Posted By BradP on 10/17/2007 6:55 AM
............. if the homeowner wants to work with the board I would absolutely let them.

Brad, for the most part, I agree with your assessments but in our case, the homeowners clearly did not want to work with the board. They would not answer our calls and letters. And there are a lot of "fair debt collection laws" that we must be wary of, that's part of the reason for going through the attorney. The amount of the legal fees surprised me but it's a done deal at this point. Let's just hope this will be a lesson for them.

Ron
SC

VI (Texas)
Posts: 3

Posted:

Thanks for all the responses. In this case the homeowner did contact us and asked us for help. We advised them to contact the Attorney since it was out of our hands. But it seems to have gotten worst. Now they are asking for our help a second time. Is there something that we can do? or is it too late to do anything for them in this case. Thanks

BradD2 (Florida)
Posts: 418

Posted:

Many Associations use attorneys for the lien and collections. The reason is that if you aren't vigilant on your collections the Association can be out quite a bit of money. We have two homeowners who have been foreclosed on and we have lost the dues owed to us. For that reason if they miss two quarters we hand the account over to the attorney. Leading up that point they have been sent a letter every month saying what they owe and threatending them with the attorney. They know it is coming when it happens.

BradD2 (Florida)
Posts: 418

Posted:

The lein and demand letter are $227. For the two we lost out on and one we are pursueing right now they don't reply to anything. Regular mail doesn't get responded to and they won't pick up the certified letter. We have joked about addressing the the certified letter from the state lottery to see if they will get it.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By RogerB on 10/17/2007 7:28 AM
VI, I would never refer a delinquent account to an attorney until such time as it needs to go to court. Let your management company work with the homeowner based on your Board established Rules and Regulations on Delinquent Assessments.

Our record speaks for itself; as our ad states: DARCO (Colorado Property Management) Serving Colorado since 1982! 100% success on collections and Covenant compliance & never been to litigation.

Why burden a delinquent homeowner, who probably is having financial difficulties, with the high attorney's expenses if the assessments and late charges are paid within 3 months? It often takes much longer when an attorney gets involved. We believe in the golden rule "Do unto others as you would have them do unto you."

RonaldW (South Carolina)
Posts: 901

Posted:

We have no MC and the homeowners did not respond to several letters including certified letters. We are not going to knock on their doors and risk violating debt collection laws or risk physical or verbal abuse. One did not return a phone message, the other has no listed phone number.

Yes, we are burdening them with additional costs, but they have not taken their responsibility to contribute to the cost of running the association seriously. They have also burdened us with trying to get them to pay their fair share.

Perhaps paying the additional cost will be a learning experience for them.

Ron
SC

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Last few posts,
The suggestion was given to lien the property and wait to collect when the property is sold.
I would like a little of that action, just like a reverse mortgage. But I'm afraid that if it becomes common in the association there won't be any operating expenses. I agree to lien is an option but the deliquent is going to have to be hurt to make him pay up. A lien before foreclosure might get you a higher ranking when the foreclosurre is settled and could be the thing to do.
It seems, lacking a management company that can get the money and lacking the desire to use a lawyer as a collection agency, and not using a collection agency, then the Board must devise ways to make the deliquent pay up. No use of common areas is one, progressivee fines for violating some covenant, maybe, anything to get into his pocket and get him paying his bills. I have been reading somewhere about an interptation of the ownership in HOA's as described as the automatic placement of a lien on the property when you sign aboard. It this was true to the courts, the lien is already in place, it just needs to be enforced. This really has no effecct on a homeowner that is current with his assessments which probably runs about 95 % in our condo.

GloriaM (North Carolina)
Posts: 829

Posted:

VI:

The board can still express to the attorney your requirements. You just shouldn't speak directly with the HO. Let the HO put into writing what they can afford to place as a deposit and what payments they can make. If the HO wants to make payments (forebearance agreement) the board could vote to enter into such an agreement. However do not allow the lien to be removed until the forebearance is paid in full. The HOA will find themselves starting all over again should you release the lien and the HO defaults on the agreement.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

RogerB: Thank you, DARCO, for your sensitivity and willingness to work with delinquent homeowners. More communities should be willing to follow DARCO'S management principles without the need to resort to attorney fees. This is what is giving HOAs the bad reputation overall.

We really need to step back and review our position of 'power' to ensure it is not being wrongly used to abuse others.

Because we CAN does not mean we SHOULD...its all in the way we choose to handle things to arrive at the end result.

NancyD1 (Florida)
Posts: 447

Posted:

Roger,

I respectfully disagree with your statement:

"Why burden a delinquent homeowner, who probably is having financial difficulties, with the high attorney's expenses if the assessments and late charges are paid within 3 months? It often takes much longer when an attorney gets involved. We believe in the golden rule "Do unto others as you would have them do unto you."

How do you know, at the inception, it will only take 3 months to collect the assessments. By then they will have also accumulated late fees, interest and now more assessments are due. It's harder to play catch-up later if the delinquencies are not stopped up front.

Roger, not to denigrate your motto, but it leads the reader to perceive something entirely different than you are alluding to. "100% collections and never been to litigation". Have you filed liens and foreclosures to collect debt? Never been to litigation with a late assessment? Why would anyone go to litigation with late assessments? It's not worth it. Again, why would anyone go to court with a compliance issue? Or is it just any litigation? I am not trying to be argumentative.

Paul,

Most people suffer enough paying the debt of others through higher interest rates on mortgages and credit cards. These institutions expect that they are going to have a percentage of individuals that are going to re neg on their debt. I did not assume that because I live in a HOA I would have to foot the bill if one of the homeowners decides not to pay their assessments. What "power" are we using to collect a legitimate debt? Is it because they are our neighbors?

I view a HOA as a business. As such, it should be run as a business.

I am not going to pay my real estate taxes next month or my AMEX bill for a few months, hopefully the city and AMEX will feel bad for me and not try to collect this debt.

Don't get me wrong, I am not a witch without feelings. I try to collect the dues for almost 2 months before the homeowner is sent to an attorney. But at that point if the homeowner will not return calls or make some sort of commitment to pay what is owed, I have no alternative but to send to collections. I have a fiduciary duty to the other homeowners who are paying their dues and this is first and foremost my biggest concern, not the delinquent homeowner who everyone has to be penalized for.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Nancy,
I am sure there will be some reaction to your post and I hope they read the part where it says an effort is made to try and settle accounts for two months. I really think the minimum payment on dues should be 3 months. for condos and some HOA with such small assessments should be by the year. No I am not a whatever. If you can't make the yearly or total payment, work something out with management (no problem), but bookkeeping costs should go down, Regime account could go into interest bearing account. For the amount involved what small amount of interest you get is not worth taking the time to write checks monthly.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

Nancy: I agree with you that sometimes 'we' end up paying the debt of others through high interet rates on mortgages and credit cards. However, we are speaking about a member of an association who has not paid his assessment fee 'on time' and may be late by 30-60-90 days; and the method being used to receive payment is for the attorney (at cost of assn.) to send letter/s.

We also read about a Board/Board member who does not want to be involved face to face with a unit owner in arrears for fear of verbal abuse, and another unit owner in arrears who does not have a 'listed' phone number so they are "unable to be reached".

In my mind, there is more going on here in both instances than just that both
assessment fees are late coming in. Ultimately, Board and resident responsibility is falling through the cracks and presently, the attorney 'route' is the only viable means and 'allowable means' at this time. Its sad for all.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

I have been thinking about this and another thing occurs to me. By our documents, and I would imagine a lot of others, there is a clause that explains if a member at any time departs for what ever reason and has deliquent account with condo that sum is to be garnered from the other members. There is a specific example about this when the documents addresses foreclosures. If, when the foreclosure is settled and any positive funds are left, they are dispersed to those in line. It is clearly possible for the Association to be so far down the line, there are no funds left. Of course, the Regime should take every effort to lien or take legal action to get moved up the line. But in todays Mortgage Money Climate, it is posibble to get upside down in the mortgage and no funds will be dispersed except to the primary note holder. That means that the members have to jointly make up these arrears. Anyone else have this in their documents?

NancyD1 (Florida)
Posts: 447

Posted:

Paul,

I have a hard time wrapping my arms around that person who has not paid his association dues. He/she knew when they bought their home in this development that there were amenities and these cost someone. Our amenities include basic cable, tennis courts, security for their home, a pool, clubhouse, and much more.. If the HOA did not pay these bills for them they would have to. I don't believe that the cable company or the security company would allow them to continue to receive these benefits without payment.

Robert made a statement about the amount of the dues, that may be why it is so crucial to my way of thinking. Our maintenance dues are over $1,000 on a quarterly basis. Our HOA is a country club without equity for the golf course but with all of the amenities that go with a country club. This may make a difference. If the maintenance fees were $50 to 100 per month, and the HOA were not paying for the amenities we pay for, I may have another opinion.

I contacted a homeowner a while ago because she was delinquent on her dues. Before I send any homeowner to the attorney, I make it a point to try to make personal contact with them to see if something can be worked out. She promised a check would be at the bank in 15 days. I let it go 20. I do not make a second call. The attorney took the collection. When she did pay the attorney the dues and his fees, she sent a letter to me personally. It was very sweet, she accused me of extorting money from her and other expletives.

A few years ago our Treasurer did not believe in sending anyone to collections. When I became Treasurer we had over $13,000 of continual money in arrears for a 6 month period. After a few quarters I realized it was almost the same individuals each time. When they were sent to collections they knew we were serious. We now have very few repeat offenders.

If a board member has a hard time collecting face to face, baring verbal abuse, I can't blame them. We volunteer our time, and yes we have to uphold that office but when do volunteers of any organization have to collect funds that are in arrears.

As for the cost to the association, why? Why would anyone HOA pay any attorney for a collection account? The homeowner pays the assessment and the attorney's fee. Our legal letter to the HO is $75. and a lien is $150., no matter what the amount due. A foreclosure is a different story, but we pay $450. This requires a court proceeding so it is understandable and reasonable.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By NancyD1 on 10/20/2007 11:35 AM
Roger,

I respectfully disagree with your statement:

"Why burden a delinquent homeowner, who probably is having financial difficulties, with the high attorney's expenses if the assessments and late charges are paid within 3 months? It often takes much longer when an attorney gets involved. We believe in the golden rule "Do unto others as you would have them do unto you."

How do you know, at the inception, it will only take 3 months to collect the assessments. By then they will have also accumulated late fees, interest and now more assessments are due. It's harder to play catch-up later if the delinquencies are not stopped up front.

Roger, not to denigrate your motto, but it leads the reader to perceive something entirely different than you are alluding to. "100% collections and never been to litigation". Have you filed liens and foreclosures to collect debt? Never been to litigation with a late assessment? Why would anyone go to litigation with late assessments? It's not worth it. Again, why would anyone go to court with a compliance issue? Or is it just any litigation? I am not trying to be argumentative.

Nancy, it is exactly as I stated; not trying to mislead anyone. Have you read our recommended rules and regulations on Delinquent Assessments which have been posted several times?

In response to your questions, we don't know when a delinquent owner will pay, but our experience has been almost all pay before a lien is filed by us. Our constant personal contact helps keep delinquencies to a minimum. Delinquent account statements which include late charges are mailed monthly. They include the total amount to be paid by the due date plus what future action will be taken if not paid by the due date.

After 3 months we fine a lien. Our lien filing fee, which is added into the lien amount, almost always encourages delinquent owners to pay prior to filing. I don't understand why you think we would file a lien just for just late charges? We would never consider such nonsense.

We file one or two liens a year. We have never needed to employ an attorney which is required to file in Court for garnishment of wages and foreclosure. You asked "why would anyone go to court with a compliance issue?" The answer is to go to Court for an injunction to enter the property to correct a violation which the owner refuses to correct.

Our procedures require a diligent effort and interaction with each problem homeowner. Granted this is unusual for management companies and some self managed Boards. But that is how we would want to be treated and so we treat owners with problems in the same way. We believe in compassion and understanding while remaining firm in enforcement.

BradP (Kansas)
Posts: 2,640

Posted:

Quote:

Posted By NancyD1 on 10/20/2007 2:00 PM
Paul,

I have a hard time wrapping my arms around that person who has not paid his association dues. He/she knew when they bought their home in this development that there were amenities and these cost someone. Our amenities include basic cable, tennis courts, security for their home, a pool, clubhouse, and much more.. If the HOA did not pay these bills for them they would have to. I don't believe that the cable company or the security company would allow them to continue to receive these benefits without payment.

Robert made a statement about the amount of the dues, that may be why it is so crucial to my way of thinking. Our maintenance dues are over $1,000 on a quarterly basis. Our HOA is a country club without equity for the golf course but with all of the amenities that go with a country club. This may make a difference. If the maintenance fees were $50 to 100 per month, and the HOA were not paying for the amenities we pay for, I may have another opinion.

I contacted a homeowner a while ago because she was delinquent on her dues. Before I send any homeowner to the attorney, I make it a point to try to make personal contact with them to see if something can be worked out. She promised a check would be at the bank in 15 days. I let it go 20. I do not make a second call. The attorney took the collection. When she did pay the attorney the dues and his fees, she sent a letter to me personally. It was very sweet, she accused me of extorting money from her and other expletives.

A few years ago our Treasurer did not believe in sending anyone to collections. When I became Treasurer we had over $13,000 of continual money in arrears for a 6 month period. After a few quarters I realized it was almost the same individuals each time. When they were sent to collections they knew we were serious. We now have very few repeat offenders.

If a board member has a hard time collecting face to face, baring verbal abuse, I can't blame them. We volunteer our time, and yes we have to uphold that office but when do volunteers of any organization have to collect funds that are in arrears.

As for the cost to the association, why? Why would anyone HOA pay any attorney for a collection account? The homeowner pays the assessment and the attorney's fee. Our legal letter to the HO is $75. and a lien is $150., no matter what the amount due. A foreclosure is a different story, but we pay $450. This requires a court proceeding so it is understandable and reasonable.

Nancy:

I do agree with you that an HOA should be run like a business. However,in your scenario above did you try to understand what the homeowner has been going through? Not all people who don't pay dues are deadbeats, losers, etc. Sometimes people buy homes and they don't know what they are getting into, or they get into financial difficulties for one reason or another, could be caused by a death in the family, unforeseen medical bills, loss of a job, injuries, etc. A lot of times people in this situation don't want to ask for help or are embarrassed. I agree with Roger that sending them to an attorney and then doubling or tripling their bill to me is not neighborly. Now...I don't live in your state, all I know is our lawyer advised us against collections and said to use liens.

To me your one attempt to contact her before sending her to an attorney was not right. In my opinion you should do exactly as the cable company would do, if they don't pay then suspend their use of the clubhouse or the pool and cut off their cable. That should happen as soon as they are delinquent. File a lien, you can always go to collections, try some other methods first, people might be willing to pay if they can take a swim or watch tv.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

BradP & Nancy: I totally am in agreement that the HOA should be run like a business, but, there are businesses and there are businesses.... It is unfortunate that not all agree though, and would rather immediately rule with an iron fist just because they CAN and the documents give them the right.
This is where we are at a crossroads in our thinking and where at this point associations differ from each other as to leadership and management style.

All I'm trying to get across is for leaders to not resort to the power-struggle as the first approach (or even second...), but to extend a hand to work together to find a solution (and, as a Board, gosh darn!!! ensure that phone numbers on file!!!--geez!)

There are other ways to 'skin a cat' (not really my first choice of words) and that's always the challenge in working through sensitive situations with residents. What goes around comes around, they say.

BradP (Kansas)
Posts: 2,640

Posted:

Paul:

Please go back and read my post, I am not condoning an iron fist, I agree with you that it isn't always black and white and as neighbors we need to show a little compassion once in a while.

BradD2 (Florida)
Posts: 418

Posted:

Brad, I understand your point of view but what if there are no ammenities to cut off? When you receive a warning letter from your electric company that if you don't pay by a certain date then they will take action you should call them. How is it different when you recieve several letters and one says you have until X date to pay and then it will turned over to a collections attorney? I understand that it probably will double their bill but we have twice in two years lost out on paid dues when the mortgage company foreclosed.

MicheleS3 (Florida)
Posts: 30

Posted:

NancyD1 - Would you have a sample of your lien claim for late HOA dues you'd be willing to share?

We are a relatively new BOD and have about 25 residents of 142 that can't seem to pay. Dues are payable in January! Our treasurer is uncertain how to handle the situation (personally, I don't believe he should be the treasurer, but that's for another day!)

I have recently taken it upon myself (secretary) to write a gentle-reminder-late-payment- letter to each of the past due residents. About 5 people responded with their payments, but now I am in the process of writing a demand letter and would like to begin preparing for any required liens. I know according to FL Statute 720 you must give 45 days notice for payment to be received, which I have outlined in the demand letter.

Anyway, if you have any other advice in reference to this subject, I'd be glad for it.

BradP (Kansas)
Posts: 2,640

Posted:

Brad:

The electric company or any utility company for example will cut off your service, but the huge difference is they don't hire an attorney that doubles or triples your bill. They will add interest and late fees, may send you to a collection agency but you are not paying attorney's fees on this. I don't know how you can compare an electric company or any company to an HOA because it is not a fair comparison, you are not comparing apples to apples. If they are not hiring attorneys to collect then why should you do that with an HOA? All I am saying is I don't think HOA's should be so quick to call the attorney and say he is 60 or 90 days late, slap on your $200 fee and go get em!! No other company that I am aware of does that. Yes you get interest and late fees, but not attorney's fees. I just don't agree with the fact that you are slapping a lot of extra money on someone's bill so early in the process, I don't think that is right.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

A question:

An Hoa has an outstanding bill on a unit for $1000.00. Let us not consider the time the fee was late. You write a letter and request payment.
They send you a check and a week later the check bounces,

Now, how do you look at the deliquent? Chances are you will consider a $1000.00 bounced check pretty serious. Your position may even be, I don't care if it is a deliquent bill for three months or one month, $1,000.00 is a hunk of change and I am going to push to get this money now, not matter one month or three. So a deliquent bill for a condo for two months could add up to $750.00 while a deliquent bill for a HOA for two months could be $100.00.
The fact that they bounced a check on you will effect your approach to collecting. I have posted before I believe the truism, "It's not your money."
People are people and logic to some is crap to another. Which opinion is right is not the issue, the issue is how can I do the best job managing someone else's money.

And of course you are all trying to do the best thing. If one is wrong it makes no difference, how is that going to change the process? It won't.

GloriaM (North Carolina)
Posts: 829

Posted:

That is a felony and should be reported to the police. You cannot write out a bad check for $1,000.00. I would immediaetly send them a late fee, an ISF fee and let them know its a felony and that the HOA will not accept any further payments from them by check, only money order or certified funds.

BradP (Kansas)
Posts: 2,640

Posted:

Robert:

As Gloria said that is a crime...once a crime has been committed in my mind all bets are off. I appreciate your comments though.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Please folks, help me ouit here, the numbers I quoted are irrevelant to the problem at hand. Change the number on the $1,000.00 to read something under the criminal act. I have a problem seeing why $1,000.00 by check is any difference than a accumulation of $1,000.00 in arrears, as far as a HOA is concerned, but that is another subject.

BradD2 (Florida)
Posts: 418

Posted:

Brad, consider for a minute our situation. We are self managed and have 50 homes with an annual budget of 22,500 (110.50 a quarter due). Half of our annual budget goes to landscaping and the rest to water, electricity, billing, mailings, insurance, website hosting, etc...

* We have lost out on several quarters worth of dues from people who have had their house foreclosed on by their banks over the last few years. Every dues payment matters.

* Before an account is turned over to a collections lawyer the owner is sent 2-3 warning letters with each becoming progressively sterner. The last one is by certified mail 30-45 days before the account is turned over. The mailed letters are ignored and the certified ones are never picked up from the post office.

* When we had a management company they used a lawyer to create the lein and it was $227 (legal fees) and $50 (administrative fees). We go directly to the lawyer so it is just $227.

* The Florida Supreme court ruled against several HOA management companies for filing liens themselves and collecting money for doing that (they charged $110). The ruling said that the management companies can do it for free or they need to hire a lawyer as they were practicing law without a licenses. This alone pushed the price of a lien way up.

The choice is between spending my time to save money for someone who is not going to appreciate it (and will most likely be aggresive towards me) and just sending it to a lawyer so I have more free time.

GlenL (Ohio)
Posts: 5,491

Posted:

Quote:

Posted By BradP on 10/24/2007 12:45 PM
Brad:

The electric company or any utility company for example will cut off your service, but the huge difference is they don't hire an attorney that doubles or triples your bill. They will add interest and late fees, may send you to a collection agency but you are not paying attorney's fees on this. I don't know how you can compare an electric company or any company to an HOA because it is not a fair comparison, you are not comparing apples to apples. If they are not hiring attorneys to collect then why should you do that with an HOA? All I am saying is I don't think HOA's should be so quick to call the attorney and say he is 60 or 90 days late, slap on your $200 fee and go get em!! No other company that I am aware of does that. Yes you get interest and late fees, but not attorney's fees. I just don't agree with the fact that you are slapping a lot of extra money on someone's bill so early in the process, I don't think that is right.

BradP most of the power companies have their own attorney on staff and do not have to hire one. Also as regulated public utilities they are limited by what fees they can add to an outstanding bill.

The fact of the matter is most of the things that an HOA can do to a deadbeat doesn't really affect them all that much to make them pay up. Sure we can suspend their right to vote; big whoop, dollars to donuts they've never voted in the first place. We also suspend their use of the pool and exercise room which sometimes affects them but we had one who just got her neighbor to let her in. Unless you go the step of posting their names (see other posts for that hot potato) or hire someone to monitor the facilities 24/7 that doesn't work; so that leaves hitting them in their pocketbook.

I wish we had the power to turn their water off (Association pays the bill) or ban them from parking on common elements like some states allow but we don't. We contracted with an attorney that specializes in collections and he adds all his fees to the delinquent accounts; which does increase what they owe by about 50%.

Payments are due on the 1st of each month with a $35.00 late fee being added if it's not paid by the 15th on the 16th the MC sends out delinquent notices. When they are 30 days late they receive a letter advising that their rights to use the common areas (pool, exercise room, clubhouse) and their voting privileges are suspended until the account is brought current.

At 90 days it goes to the attorney who files the lien and adds his costs and court fees. At six months it goes to foreclosure and the HO is now liable for fair rental value of his property.

I understand that there are legitimate reasons why people can and do get behind in their bills, sickness, loss of income etc. and I'm all for giving people a chance to work their way out of a hole if they contact the BOD or MC set up a payment plan and STICK TO IT. We had one HO who came to the BOD and explained that they had cancer and were unable to pay until they sold their unit. We protected our interests with a lien waived the late fee's and got paid when the unit sold. That HO did it right but the sad fact is the majority of the people hide their heads in the sand and let it get too far out of hand.

Just out of curiosity how far in arrears should a HOA let someone get before they get an attorney involved to get what's owed 1 year? 2 years? Or is there a set dollar figure when you think it' OK to go after the deadbeat.

Studies show that 5 out of 4 people have problems with fractions

BradP (Kansas)
Posts: 2,640

Posted:

Glen:

Things vary by state, in our state and our HOA we don't need an attorney to file a lien. We did that by ourselves. Each HOA is different, all I am saying is I don't agree with throwing them to the wolves after 30 or 60 days being behind. I didn't say don't collect their money, all I am saying I think it is junk to needlessly add money on to their bill.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Brad and Glen,
Lots of logic make this an interesting post. You are both working the way to come to a mutual conclusion.
Both will recognize the point doesn't apply the same across the board.

It does matter if it is an HOA or a Condo. Some Hoa's change $15 a month, not unusual for Condo to be $350 or higher.

So it is not the lateness that matters alone, nor is it the amount.

Add to the mix, as described, the variable way the different states and counties adjudicate the matter and it becomes a guessing game.

One size does not fit all, but I enjoyed the differences and learned a few things, thank you.

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