Withholding Amenities from High Delinquency Accounts

HappyE (Texas)
Posts: 24

Posted:

We have several accounts with high balances over $500. The only amenities we have are a gated park, HOA mailboxes (to be replaced soon), and a gated entry (currently broken, but will be fixed soon). Is it legal/worth trying to withhold access to any of these in effort to try to collect on those accounts?

Gated park - this is a manual keypad with a single code for the whole neighborhood. We could change the code and only give access to current accounts.

Mailboxes - we are replacing HOA maintained mailboxes to the new STD-4C mailboxes to help fight mail theft. A special assessment was issued to all residents to pay for the new mailboxes. I don't think it's legal to withhold access to mail, however I am thinking we direct any accounts with delinquencies to work directly with property management to get their key instead of the general key pass out at the park with volunteers. That way at least they can talk through their balance as part of the process of getting their new mail key. Payment wouldn't be required to receive the key, but we're hoping the person to person conversation would help clear up any concerns that might be preventing some from paying.

Gate - our gates have been broken for 1.5 years. It will be a big effort to put them back into operation, including giving everyone new unique entry PINs. Is it legal to withhold access to the gate for delinquent addresses? If not, we were thinking the same thing where they need to contact property management to get their gate PIN, and we would ask property management to talk through the owner's balance during that conversation.

MaxB4
Posts: 3,513

Posted:

1) You could remove access to gated park.

2) You cannot remove access to mailboxes, while they may be owned by the association, they are regulated by the federal government.

3) You can not denied gate access to a delinquent owner. You can deny giving the code so visitors can enter. If the owner wants access, have them get a remote.

HappyE (Texas)
Posts: 24

Posted:

Could we require they contact property management to get their new mail key and gate code if they have a delinquent balance? We were planning a local event at the park to distribute to most of the residents to make it easier on everyone.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By HappyE on 04/19/2021 12:13 PM
Could we require they contact property management to get their new mail key and gate code if they have a delinquent balance? We were planning a local event at the park to distribute to most of the residents to make it easier on everyone.

You can withhold their gate code, but under no circumstance do you withhold the mail key(s)

BenA2 (Texas)
Posts: 1,273

Posted:

Quote:

Posted By HappyE on 04/19/2021 12:13 PM
Could we require they contact property management to get their new mail key and gate code if they have a delinquent balance? We were planning a local event at the park to distribute to most of the residents to make it easier on everyone.

I don't think there is anything illegal about requiring the owner to contact the manager for keys or codes but I don't see the point. I doubt that the inconvenience or the embarrassment will cause anyone to pay up. There might be a problem with singling out the non-paying members if there is ever a claim of discrimination. If they have a right to the mailbox and gate access (and I think they do), then you should treat them just like everyone else to avoid any appearance of bad intentions.

As to denying access to the park, I would adopt a rule stating that only members who have paid their dues are entitled to access. The board should be able to do this on their own unless your governing docs say otherwise.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Happy

Typically you cannot deny access to one's home/property. You can make them jump through some hoops to get access like taking away their main gate access and forcing them to us another, less convenient entrance.

You can take away their access to amenities like parks, pools, etc.

You cannot deny access to their mail. Do not even discuss this.

KerryL1 (California)
Posts: 14,550

Posted:

Do your CC&Rs or some other doc give the Board the right to withhold amenities?

KellyM3 (North Carolina)
Posts: 2,239

Posted:

It's more appropriate to use your state's collections process, via attorney representation, to start the collections process. Delinquent account holders will need to reimburse your legal fees associated with having to chase them.

Since you use a common PIN to access your gated park, it's pointless to change the universal PIN and you can't limit property or mailbox access.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By HappyE on 04/19/2021 12:13 PM
Could we require they contact property management to get their new mail key and gate code if they have a delinquent balance? We were planning a local event at the park to distribute to most of the residents to make it easier on everyone.

Is your Board's intent to harass? I cannot see any other reason for requiring this. The punishments a non-condo HOA Texas may administer are outlined in Texas Property Code 209.006. Importantly, you have to give proper notice and much more. See TPC 209.006 at https://statutes.capitol.texas.gov/Docs/PR/htm/PR.209.htm

I agree with others that the only thing the HOA could lawfully suspend is use of the park.

BarbaraT1 (Texas)
Posts: 821

Posted:

Quote:

Posted By HappyE on 04/19/2021 12:05 PM
We have several accounts with high balances over $500. The only amenities we have are a gated park, HOA mailboxes (to be replaced soon), and a gated entry (currently broken, but will be fixed soon). Is it legal/worth trying to withhold access to any of these in effort to try to collect on those accounts?

Gated park - this is a manual keypad with a single code for the whole neighborhood. We could change the code and only give access to current accounts.

Mailboxes - we are replacing HOA maintained mailboxes to the new STD-4C mailboxes to help fight mail theft. A special assessment was issued to all residents to pay for the new mailboxes. I don't think it's legal to withhold access to mail, however I am thinking we direct any accounts with delinquencies to work directly with property management to get their key instead of the general key pass out at the park with volunteers. That way at least they can talk through their balance as part of the process of getting their new mail key. Payment wouldn't be required to receive the key, but we're hoping the person to person conversation would help clear up any concerns that might be preventing some from paying.

Gate - our gates have been broken for 1.5 years. It will be a big effort to put them back into operation, including giving everyone new unique entry PINs. Is it legal to withhold access to the gate for delinquent addresses? If not, we were thinking the same thing where they need to contact property management to get their gate PIN, and we would ask property management to talk through the owner's balance during that conversation.

It doesn't sound like your association has a collection policy in place. You should work with an attorney to develop one that states the due date, the date payment is considered late, and any penalties that will be applied to unpaid assessments, such as late fees, interest, and denial of amenity access. As others have said, the only thing you could deny would be access to the park, but you can't do that without sending them a written noticed and giving them time to cure.

MarkM19 (Texas)
Posts: 1,459

Posted:

Happy,
As someone who has always been frustrated by delinquent accounts I feel your pain.

My last HOA in Ca. had a Mailroom that was accessed by a Key Fob system and held all of our 438 Mailboxes and that was it. I tried floating the idea about restricting access and having the owners have to go to the Post Office on the other side of town which was a pain to collect their mail. We would not have denied them access to mail just made them have to go off site to get it. IMO the building was the HOAs and only members in Good Standing should be allowed entry. I was on the board for 8 years and I never could get the Majority to want to get it done. It is a TUFF ask to get boards stand up a fight for Collections.

On a separate note about your HOA you mention a lot of things that need to be repaired in your HOA. It is important to keep up with maintenance so that people do not have reasons to not pay the dues.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By MarkM19 on 04/22/2021 12:30 PM
Happy,
As someone who has always been frustrated by delinquent accounts I feel your pain.

My last HOA in Ca. had a Mailroom that was accessed by a Key Fob system and held all of our 438 Mailboxes and that was it. I tried floating the idea about restricting access and having the owners have to go to the Post Office on the other side of town which was a pain to collect their mail. We would not have denied them access to mail just made them have to go off site to get it. IMO the building was the HOAs and only members in Good Standing should be allowed entry. I was on the board for 8 years and I never could get the Majority to want to get it done. It is a TUFF ask to get boards stand up a fight for Collections.

On a separate note about your HOA you mention a lot of things that need to be repaired in your HOA. It is important to keep up with maintenance so that people do not have reasons to not pay the dues.

I just do not think restricting access to one's mail is legal. It is not a road I would ever recommend to our BOD. I am for Public Shaming but many say no to that.

LetA (Nevada)
Posts: 2,679

Posted:

Mailboxes are never an amenity and you should NEVER deny someone access to the USPS boxes. Pools, Sauna, Jacuzzis, Gyms, Parks and the like are Amenities and you can deny them access to them If everything you have is by key fob access, get with your key fob administrator and modify the gatekeeper program to deny them access to said amenities. Also NEVER deny anyone access to the community. If parking is an amenity, you can deny them access to owners parking and have them jockey for a parking spot in the visitors lot.

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By MarkM19 on 04/22/2021 12:30 PM
My last HOA in Ca. had a Mailroom that was accessed by a Key Fob system and held all of our 438 Mailboxes and that was it. I tried floating the idea about restricting access and having the owners have to go to the Post Office on the other side of town which was a pain to collect their mail. We would not have denied them access to mail just made them have to go off site to get it.

How would you have gone about getting the USPS to deliver the mail (of those owners who were delinquent in paying their HOA dues) to the Post Office on the other side of town? Last I checked, USPS Change of Address forms have to be signed by the person who intends to receive the mail.

I am with JohnC46, LetA, others, 18 USC 1701 (U. S. Criminal Code, Obstruction of Mails Generally. A violation of 18 USC 1701 is punishable by a fine, six months in prison or both), and Fair Debt Collection law.

HappyE (Texas)
Posts: 24

Posted:

Quote:

Posted By LetA on 04/22/2021 1:52 PM
Mailboxes are never an amenity and you should NEVER deny someone access to the USPS boxes. Pools, Sauna, Jacuzzis, Gyms, Parks and the like are Amenities and you can deny them access to them If everything you have is by key fob access, get with your key fob administrator and modify the gatekeeper program to deny them access to said amenities. Also NEVER deny anyone access to the community. If parking is an amenity, you can deny them access to owners parking and have them jockey for a parking spot in the visitors lot.

Well, since we are a private neighborhood, the HOA is fully on the hook for replacing mailboxes as USPS will not provide them for us. We just issued a special assessment of $100 per unit to fund the mailbox replacement. The idea was floated of using this opportunity to somehow help raise awareness of long standing balances and hopefully get people to pay up.

We do have a collection protocol in place, but several units have not paid for over a year and already have liens on their homes now as a result. We wanted to explore any alternative before proceeding with foreclosure, but it looks like that is our only option.

For now, we just decided that we are going to pass out keys to all residents in labeled envelopes. For any accounts with balances, we will insert a friendly reminder inside informing them we need people to pay their balances to help fund this new mailbox that we just put in and will include print out of their balances. Even if it helps get a few people to pay up, we feel it's worth the effort, and there is no discrimination in play.

Thanks to all for your input, it was very helpful.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Yeah hold up on the foreclosure step. That is just a "stop the bleeding" step. Each situation is different when you go into the foreclosure step. So not every situation is equal or the same. Plus you never foreclose on a house if a bank foreclosure is in place.

If it were me, I would make sure that the owner is getting the notices. I would certify email their HOA address AND where they may be living. You can't rely on the resident giving the owner the notification. Plus you do need to make sure to record communication to the HOA address for legal purposes. Never open an unopen certified letter. You need that for proof it was delivered.

Let people know they have a lien for unpaid dues and the consequences. Quote the rules in the letter. Plus let them know your considering foreclosure as the next step. Do not go in this assumming communication has been achieved.

Former HOA President

JohnC46 (South Carolina)
Posts: 14,265

Posted:

My experience with late payers is they are pretty much going to ignore any communication from the BOD. You need to scare them. A letter from your lawyer telling them the possible steps that can be taken, foreclosure, credit reporting, etc. usually make many people pay attention.

BarbaraT1 (Texas)
Posts: 821

Posted:

Quote:

Posted By HappyE on 04/22/2021 7:00 PM

Posted By LetA on 04/22/2021 1:52 PM
Mailboxes are never an amenity and you should NEVER deny someone access to the USPS boxes. Pools, Sauna, Jacuzzis, Gyms, Parks and the like are Amenities and you can deny them access to them If everything you have is by key fob access, get with your key fob administrator and modify the gatekeeper program to deny them access to said amenities. Also NEVER deny anyone access to the community. If parking is an amenity, you can deny them access to owners parking and have them jockey for a parking spot in the visitors lot.

Well, since we are a private neighborhood, the HOA is fully on the hook for replacing mailboxes as USPS will not provide them for us. We just issued a special assessment of $100 per unit to fund the mailbox replacement. The idea was floated of using this opportunity to somehow help raise awareness of long standing balances and hopefully get people to pay up.

We do have a collection protocol in place, but several units have not paid for over a year and already have liens on their homes now as a result. We wanted to explore any alternative before proceeding with foreclosure, but it looks like that is our only option.

For now, we just decided that we are going to pass out keys to all residents in labeled envelopes. For any accounts with balances, we will insert a friendly reminder inside informing them we need people to pay their balances to help fund this new mailbox that we just put in and will include print out of their balances. Even if it helps get a few people to pay up, we feel it's worth the effort, and there is no discrimination in play.

Thanks to all for your input, it was very helpful.

The HOA has to pay in a public neighborhood too. The post office doesn't supply CBUs.

If you have a collection policy, you should follow it. If that policy says that you foreclose on accounts that owe more than X amount or are X amount in arrears, then foreclose.

Maybe your delinquent owners aren't paying because they know there are no real consequences.

In my experience, it only takes the notice of intent to foreclose to kick most delinquent owners in gear. I've had a few that dragged it out to the day before the auction, but most will pay or enroll in a payment plan as soon as they realize you mean business.