Negotiating Past Due Monthly Dues/Fines

We have a homeowner who owes the association about $12,000. He had a small prior balance before he stopped paying monthly dues in January 2019. Each time his $222 monthly payment is late he also gets a $25 fine, so this is adding up. In 2019 he also got fined two times, $1000 each, for roof violation (refused to pressure wash his moldy roof) and landscaping violations (refused to maintain his landscaping). I was not on the board at that time. His account is now with a collection agency and he gets monthly invoices, plus he asked for the full file in September 2021 so he is aware of the debt he owes. He is up to date on the taxes for the house and he does not have a mortgage. Money does not appear to be an issue with this debt. We have had a lien on the home for two years.

He came to our Monday board meeting because he was on the agenda for fining again for his roof and landscaping (once again neglected)

At the meeting we asked him if he was aware of how much money he owed the association. He claimed it was only about $1500 and that he had been paying his monthly dues every month. It was one excuse after another. We made him aware that we are updating the lien and plan to file for foreclosure after the 45 day waiting period. After the meeting, our PM contacted the collections agent and she sent him his account again. Yesterday he wanted to know the details on the 2019 fines. Then he had a long discussion with the collections agent and says he is thinking about paying the monthly dues but is refusing to pay the old fines. The collections agent asked him to put an offer in writing for the board to consider.

Here's the question. I read a couple of articles online that said in Florida a board cannot negotiate the past due monthly dues because they have a fiduciary duty to collect the dues and it's not fair to discount that for someone who simply hasn't paid. However, I can't find anything about discounting fines. Any thoughts on whether or not a board should negotiate a debt like this?

Because we have a large HOA this amount is not a huge burden for us, but after two years it was clear he wasn't going to pay voluntarily so we are trying to move things along. I'm of the mind not to negotiate, but is getting most of the debt and settling this without the foreclosure better than having to file a lawsuit?

MichaelT's( personal ?) philosophy is pretty much how do it in our HOA. If the fee or whatever doesn't come out of Owners' pockets, our Board has waived them to get settled.

Never waive or reduce dues.

If the man does not have money issues and it appears he's just a deadbeat that doesn't want to pay his dues, why would you even consider negotiating with him? More than likely he will do this again. It sounds like he enjoys the game.

Thank you for the advice. Still no word from him on his offer of what he wants to pay. According to the lawsuit he's involved in with his family over his mother's estate, he has changed lawyers several times because he doesn't seem to pay them either. I agree this is a game he seems to like to play.

There are two wrinkles to the story. One, which doesn't seem to be too significant, is that there is a lis pendens from the lawsuit filed on the property. Our lien takes precedence so we aren't worried. The other wrinkle is that we never charged interest on this debt. In investigating his account, our treasurer questioned the PM about that. She said a previous board president told her we could charge a late fee or interest but not both. Our new declaration that was signed in March 2021 definitely says we can charge interest. We believe the old documents say that also. So if we go back and add the 18% interest to his account that should have been charged then the amount goes up significantly.

I suspect he has contacted his attorney and we will be getting a letter soon with every reason why he doesn't have to pay.

Do not expect to get paid. You are not. I faced similar situation. They will not pay. So get that out of your head as that is the power they have. Simply move forward as not going to see that money. It is a wash. Here on out for and kick them out. If they want to stay then they play your rules not theirs. Your rules are pay up or shut out.

I agree that the HOA has no authority to negotiate lower assessments. They're set by your CC&Rs - and your CC&Rs probably also specify that collection and attorney fees must be passed on to the homeowner. The only things the board can change are late fees, fines, and random charges such as use fees.

I agree with talking to an attorney and getting the foreclosure ball rolling. It's overdue.

Some states allow foreclosure based on non-assessment debt (fines, etc.) and others do not.

There may be limitations on collecting due to the pandemic - I'm not sure if the various bans have expired yet or not.

Our attorney told us that the HOA has a better chance of a successful foreclosure if a homeowner stops paying altogether. It can be harder if the homeowner pays occasionally. Some attorneys advise that if a homeowner is playing the game with occasional payments then the HOA should not accept partial payments and only accept a payment of the total amount due. But follow your attorney's advice on this.

I did speak with our collections attorney regarding foreclosure. She is the one currently speaking with him regarding how much he owes. We have updated the lien (filed two years ago) with the amount due today and recorded it. Now we are in a 45-day waiting period. If he doesn't pay within the 45 days we can file the foreclosure paperwork. That will cost the association a $4500 retainer and at that point he can pay the bill, including the attorney's fees, any time up until they auction off the house. The Florida statute is pretty clear on the foreclosure process so theoretically this should be an easy case, but since he has a history of litigation I think he will do everything in his power to fight paying and foreclosure.

One of the reasons I really don't feel sorry for this guy is that the housing market is still booming in our area. If he put it up for sale on the open market (which he can't due to the estate lawsuit) it would probably sell within a couple of days for full asking price even though the outside is a mess.

Until he gets back to us with some kind of an offer we are just waiting but we won't hesitate to file the foreclosure if he doesn't respond.

Why putting lawyer on retainer? That may not be necessary. Considering this is an exense you may not really get back. They may owe it but does not equal pay it still. It is just filling in a hole. Reduce expenses where possible

I did a foreclosure no retainer for the lawyer. It is not necessary.

Out of about 5000 doors our company services, we have two owners that owe $7K and another $15K. All the others are current up to 2 month delinquent. I had one account where they had 5 owners owing $50K total. I sent letters to foreclose and 4 of them paid in full within 2 months.

I also have had mortgage companies pay off the delinquencies and add to the borrower's account. I have the resources to make most of this happen. I have never used an attorney as I feel they are just a waste of money. Most management companies should have the same resources as I do. If self managed, they are kinda, SOL.