Weaning homeowners from paper payment coupons

MichaelT21 (Arkansas)
Posts: 462

Posted:

I would like to wean our homeowners off of paper payment coupons. Currently we spend about $1,200 per year mailing out paper payment coupons to homeowners. I am trying to figure out a better way.

How do other HOAs do it? What options can we consider on eliminating paper payment coupons?

LisaB21 (Texas)
Posts: 97

Posted:

Do your homeowners pay annually? Monthly?

MichaelT21 (Arkansas)
Posts: 462

Posted:

Quarterly

LisaB21 (Texas)
Posts: 97

Posted:

How often are you sending the coupons out to them? Also Quarterly?

LoriM15 (Florida)
Posts: 1,009

Posted:

I'd love to get ideas for this too. We send a booklet of monthly coupons each year to every homeowner. There's no way to send to just people who request. It's expensive. We offer payment throught a web portal, click pay (pulls from owner's bank account) or they can even bring a check to the clubhouse. But I have board members who think we still must send booklets to everyone.

MichaelT21 (Arkansas)
Posts: 462

Posted:

We sent out one coupon mailing per year. It costs $5.50 per coupon book, and with 274 owners, it's just over $1000 in coupon book mailing costs.

I am thinking that we print a 8.5x11 paper with the payment coupons and include it in the budget ratification meeting announcement, which would cost us hardly anything. I'm not sure if our PM will do this as part of the contract, but if not, my wife and I can create a mail merge for self-created payment coupons.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

We never sent out a coupon ever. What was the point? You should know you owe dues, when, and how much. It's in your documents. Plus we had a payment box right next to the mailboxes. It was clear you lived in a HOA and owed dues. Just had to put your check in the box with your lot # in the comments. Pay automatic online as well.

It's bit of a "known" thing and documented is it not?

Former HOA President

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By MelissaP1 on 10/07/2022 8:27 AM
We never sent out a coupon ever.

Same here. We post notices on the board by the exit gate, and send email reminders.

Escaped former treasurer and director of a self managed association.

WendyM5 (North Carolina)
Posts: 1,522

Posted:

ditto, our Governing documents dont' say we have to mail out a coupon packet. We simply are required to have a single annual meeting. When that is mailed out we send out every conceivable notice in that same mailing. Dues Policy, Fines Policy, Election ballot, etc. no reason to send out more than one mailing a year IMHO. We also recently got a city grant that we are spending on new reminder signs that will go around the neighborhood 2x3' in size so easy to read.

vis ta vie

LetA (Nevada)
Posts: 2,679

Posted:

Is the cost of the payment book billed separately to the HOA or is the cost rolled into the PMC's CODB?

Second, what do your governing documents say about delivery of assessment payment notices?

Our PMC sends out the payment book around December for the following year, Since it is quarterly It is one sheet
of 8.5x 14 Legal paper and 4 envelopes with windows.

The cost you stated seems ungodly expensive. The cost of a
single color copy at a copy shop is around 40 cents per page and a box of 500 envelopes with windows is around
$53.00 and a ream of paper is $14.0 at the high end, with $150 for postage That leaves about $800 for an hours
worth of labor, that' insane. you might be able to negate the cost of this by taking the payment coupon file
to a copy shop that can copy and fold your payments, all you have to do is stuff and stamp each envelope.

Take a survey of your owners to see what they want. I get it some still like writing that paper check.
Does the PMC offer a payment portal on their website? Maybe the bank your HOA
banks with has a payment portal. Since just about everyone has a smart phone, get an app developed
that acts as a payment portal and community information bulletin board.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Our MC sent out a coupon book but if used with a check, there was a service charge. One could pay with a credit card but also a service charge. If one paid with an electronic check or automatically monthly withdrawal (as I do), there is no service charge.

SheliaH (Indiana)
Posts: 6,964

Posted:

We still have paper coupons, but I think over half pay via automatic deduction at their bank, so I'd start with the numbers. Can your bank help you see who pays online vs. those who dont? Our monthly bank records included reports that showed us tge dates assessments cane in and from who, and they could indicate if paid by paper check.

If you get those numbers, you could target those homeowners, telling them the advantages: the association saves printing and postage costs, you don't have to worry about mail getting lost or stolen, nor do you have to go to the office yourself to drop it off, and you have records of deposits in real time to avoid over late fees.

As more people begin paying online, you could stop sending them paper, although you still need to tell them when the assessment will change and tge effective date. We do that in December when we send the annual budget for the new year.

All of that said, you may still have older people who are more comfortable with paper and/or don't have internet access, so you'll still have to make it available. It think very soon nearly everyone will be paying at least half their bills this way

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

JohnC73 (Massachusetts)
Posts: 344

Posted:

Quote:

Posted By MichaelT21 on 10/07/2022 7:54 AM
I would like to wean our homeowners off of paper payment coupons. Currently we spend about $1,200 per year mailing out paper payment coupons to homeowners. I am trying to figure out a better way.

How do other HOAs do it? What options can we consider on eliminating paper payment coupons?

We are in the process of implementing a paperless billing "OPTION". Owners choose their preference for delivery with the default being US Mail. This includes billing and other notifications from the association. Getting owners to respond to the process is a challenge though. I think the response rate is around 40% so far.

John

LetA (Nevada)
Posts: 2,679

Posted:

There was talk a few legislative sessions ago about having the mortgage lender collect the assessment and paying the HOA, but that went nowhere considering the HOA lobby at that time had a very strong
hold in the legislature.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By LetA on 10/08/2022 1:58 PM
There was talk a few legislative sessions ago about having the mortgage lender collect the assessment and paying the HOA, but that went nowhere considering the HOA lobby at that time had a very strong
hold in the legislature.

This would never for a variety of reasons.

1) Knowing who was running the association, self managed or with a management company.
2) Loan servicers want to be able to pay annually, not quarterly or monthly
3) Have to write way too many checks
4) lack of communication when HOA changes management companies.

The list is endless

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By MaxB4 on 10/08/2022 8:17 PM

Posted By LetA on 10/08/2022 1:58 PM
There was talk a few legislative sessions ago about having the mortgage lender collect the assessment and paying the HOA, but that went nowhere considering the HOA lobby at that time had a very strong
hold in the legislature.

This would never for a variety of reasons.

1) Knowing who was running the association, self managed or with a management company.
2) Loan servicers want to be able to pay annually, not quarterly or monthly
3) Have to write way too many checks
4) lack of communication when HOA changes management companies.

The list is endless

Considering the usual lack of cooperation I saw with mortgage companies when we informed them of homeowners who were delinquent in paying assessments, I for one, don't give a fast you know what about how much work they'd have to do.

The mortgage agreement usually state the homeowner isn't to do anything that would result in a lien being placed on the house, so you would think it makes sense to at least send an annual notice to the homeowner requiring him or her to verify the community's property manager and contact information.

No, this doesn't guarantee there won't be problems, but it's a start. They could also pay all the assessments for the year in January and be done with it. And if the homeowner quit paying the mortgage, the bank can go ahead and sue and the HOA wouldn't have to get involved because it would already have its money.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By MaxB4 on 10/08/2022 8:17 PM

Posted By LetA on 10/08/2022 1:58 PM
There was talk a few legislative sessions ago about having the mortgage lender collect the assessment and paying the HOA, but that went nowhere considering the HOA lobby at that time had a very strong
hold in the legislature.

This would never for a variety of reasons.

1) Knowing who was running the association, self managed or with a management company.
2) Loan servicers want to be able to pay annually, not quarterly or monthly
3) Have to write way too many checks
4) lack of communication when HOA changes management companies.

The list is endless

Since taxes go up every year, your point seems moot. It seems to me every year I get a letter from my mortgage holder that I need to pay X dollars because they audited my escrow account and
It came up short. Personally I counter that by paying an extra $20.00 each month and mark on the payment slip $20.00 goes to the escrow account.

MaxB4
Posts: 3,513

Posted:

There are regulation on how much can be held in an escrow account. Should check it out.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By SheliaH on 10/10/2022 7:39 AM

Posted By MaxB4 on 10/08/2022 8:17 PM

Posted By LetA on 10/08/2022 1:58 PM
There was talk a few legislative sessions ago about having the mortgage lender collect the assessment and paying the HOA, but that went nowhere considering the HOA lobby at that time had a very strong
hold in the legislature.

This would never for a variety of reasons.

1) Knowing who was running the association, self managed or with a management company.
2) Loan servicers want to be able to pay annually, not quarterly or monthly
3) Have to write way too many checks
4) lack of communication when HOA changes management companies.

The list is endless

Considering the usual lack of cooperation I saw with mortgage companies when we informed them of homeowners who were delinquent in paying assessments, I for one, don't give a fast you know what about how much work they'd have to do.

The mortgage agreement usually state the homeowner isn't to do anything that would result in a lien being placed on the house, so you would think it makes sense to at least send an annual notice to the homeowner requiring him or her to verify the community's property manager and contact information.

No, this doesn't guarantee there won't be problems, but it's a start. They could also pay all the assessments for the year in January and be done with it. And if the homeowner quit paying the mortgage, the bank can go ahead and sue and the HOA wouldn't have to get involved because it would already have its money.

California has near 60,000 HOA's, of which about 30,000 are self-managed. Many of those 30,000 are not incorporated and many do not update their records with the Secretary of State. Good luck with communicating back to a loan servicer.

Below is the language pertaining to borrower and lender in regards to an HOA.

A. PUD Obligations. Borrower shall perform all of Borrower's obligations under the PUD's Constituent Documents. The "Constituent Documents" are the: (i) Declaration; (ii) articles of incorporation, trust instrument or any equivalent document which creates the Owners Association; and (iii) any by-laws or other rules or regulations of the Owners Association. Borrower shall promptly pay, when due, all dues and assessments imposed pursuant to the Constituent Documents.

F. Remedies. If Borrower does not pay PUD dues and assessments when due, then Lender may pay them. Any amounts disbursed by Lender under this paragraph F shall become additional debt of Borrower secured by the Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of disbursement at the Note rate and shall be payable, with interest upon notice from Lender to Borrower requesting payment.

SheliaH (Indiana)
Posts: 6,964

Posted:

And so we get to the heart of the matter - money. The mortgage company already had a secured interest in the house or condo, so if the owner defaults, they know they'll get at least some of their money back, so what do they care if the HOA gets theirs? Even if the HOA does things like snow removal or lawn care so the community looks halfway decent to encourage potential buyers to have a look and consider buying the house so the bank can make its all important profits?

(The same profits you and I never see because banks aren't paying a decent interest rate on the savings accounts and CDs we get to enable them to loan the money in the first place!)

For the self managed HOAs, I suppose the state can mandate incorporating HOAS, but that also takes time and money, and no one wants to pay the taxes to do it. The final probably won't be easy, but I don't think the current set up is working.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By SheliaH on 10/10/2022 10:48 AM
And so we get to the heart of the matter - money. The mortgage company already had a secured interest in the house or condo, so if the owner defaults, they know they'll get at least some of their money back, so what do they care if the HOA gets theirs? Even if the HOA does things like snow removal or lawn care so the community looks halfway decent to encourage potential buyers to have a look and consider buying the house so the bank can make its all important profits?

(The same profits you and I never see because banks aren't paying a decent interest rate on the savings accounts and CDs we get to enable them to loan the money in the first place!)

For the self managed HOAs, I suppose the state can mandate incorporating HOAS, but that also takes time and money, and no one wants to pay the taxes to do it. The final probably won't be easy, but I don't think the current set up is working.

Good luck!

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By MaxB4 on 10/10/2022 10:54 AM

Posted By SheliaH on 10/10/2022 10:48 AM
And so we get to the heart of the matter - money. The mortgage company already had a secured interest in the house or condo, so if the owner defaults, they know they'll get at least some of their money back, so what do they care if the HOA gets theirs? Even if the HOA does things like snow removal or lawn care so the community looks halfway decent to encourage potential buyers to have a look and consider buying the house so the bank can make its all important profits?

(The same profits you and I never see because banks aren't paying a decent interest rate on the savings accounts and CDs we get to enable them to loan the money in the first place!)

For the self managed HOAs, I suppose the state can mandate incorporating HOAS, but that also takes time and money, and no one wants to pay the taxes to do it. The final probably won't be easy, but I don't think the current set up is working.

Good luck!

California has 58 counties, with multiple cites, townships, and villages, each with a different property tax amount.
So what's your point? If property taxes can be collected via the mortgage payment and dispersed to the appropriate county
then HOA assessments can be collected on each mortgage payment and dispersed appropriately as well.

MaxB4
Posts: 3,513

Posted:

Quote:

Posted By LetA on 10/10/2022 3:44 PM

Posted By MaxB4 on 10/10/2022 10:54 AM

Posted By SheliaH on 10/10/2022 10:48 AM
And so we get to the heart of the matter - money. The mortgage company already had a secured interest in the house or condo, so if the owner defaults, they know they'll get at least some of their money back, so what do they care if the HOA gets theirs? Even if the HOA does things like snow removal or lawn care so the community looks halfway decent to encourage potential buyers to have a look and consider buying the house so the bank can make its all important profits?

(The same profits you and I never see because banks aren't paying a decent interest rate on the savings accounts and CDs we get to enable them to loan the money in the first place!)

For the self managed HOAs, I suppose the state can mandate incorporating HOAS, but that also takes time and money, and no one wants to pay the taxes to do it. The final probably won't be easy, but I don't think the current set up is working.

Good luck!

California has 58 counties, with multiple cites, townships, and villages, each with a different property tax amount.
So what's your point? If property taxes can be collected via the mortgage payment and dispersed to the appropriate county
then HOA assessments can be collected on each mortgage payment and dispersed appropriately as well.

Seriously???

Servicers only need to make 58 payments, twice a year. For insurance, there could be 20 insurance companies that they make payments once a year. Servicers know where the tax office is and the insurance company, they don't know where the HOA's office is. I had one HOA change management companies 4 times in one year. When I was at Countrywide back in the early 2000's, we investigated the possibility. It was a nightmare.

KellyM3 (North Carolina)
Posts: 2,239

Posted:

Michael,

The best strategy is to wean the community off coupon books, which occurs by creating opt-in policies for all new buyers (they must request books as they're not sent by default). Existing residents can receive coupon books unless they register of auto-draft, at which point, a book is pointless.

It takes a while and you may never eradicate coupons but you can diminish postage costs.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By KellyM3 on 10/13/2022 10:47 AM
Michael,

The best strategy is to wean the community off coupon books, which occurs by creating opt-in policies for all new buyers (they must request books as they're not sent by default). Existing residents can receive coupon books unless they register of auto-draft, at which point, a book is pointless.

It takes a while and you may never eradicate coupons but you can diminish postage costs.

Also add a service charge for any type of non-electronic withdrawal such as a service charge for use of checks and credit cards.