Where does paying HOA dues fit into the scheme of things?

When money is tight:

The first bill you pay each month is the mortgage.
The second bill you pay is the insurance. (This is according to Leigh Anne Tuohy in "The Blind Side")
Is the HOA dues the third bill that gets paid??

I'm thinking that people pay the people that call first, or ones that directly impact credit scores. So if one stops paying the credit card company, that gets noticed right away so it's tempting to pay them first. The HOA doesn't call or do anything besides mail notices for 9 months, so it's easy to ignore for a long time.

I think utilities (garbage, water, electric) are the last to get paid because those companies rarely, if ever, stop services for non paying customers.

Any guesses to where the HOA payment fits in to the payment sequence for families where money is tight and bills have to be prioritized?

It's just sad.

Because of the way we work, the costs grow incredibly fast once we send them to legal collections. An account behind by $900 in, say, January, climbs to $7000 behind by October. Most of that is money we cannot waive (we can waive late fees and interest, but not legal fees or assessments).

Thus, I simply cringe when homeowners get delinquent.

Most often, they ignore us. If they actually talked to us, we could hold off on sending to legal collections for a few months, or encourage them to seek advice, or offer to waive expenses that we could waive to help them out, but they go radio silent and then we have no choice.

The HOA didn't use to do much when people didn't pay, so some didn't pay for 9 years. We sure do know. While we take care to obscure the name & address of the homeowner, we do make motions in open session to send accounts to legal collections. I think word is getting out.

I agree with your assessment that HOA dues are way down the line for payment sequence when money is tough.

Agree 100%.

Dues are like utilities. You do not pay them they get cut off. I. This case you can lose your house instead of water. So I put them like my electric bill. Keep in mind the bank factors in dues when approving your mortgage. You can buy a bigger house in a non HOA or buy smaller in a HOA. The dues making a bit difference in what approved for. The bank counts the dues up there close to mortgage.

I agree that probably most people think of dues like utilities, as they are small bills to pay similar to utilities. I think this makes a lot of sense in my mind when I see the list of non-paying homeowners.

I think many people are surprised when we send the accounts to legal collections and they find out they are at risk of losing their home. Then all of a sudden, paying HOA dues becomes a lot higher priority in their life.

I agree that they're probably near the bottom of the list for people with financial troubles. But they should be right up with the mortgage when you consider the risk of non-payment. I suspect many people don't understand that the HOA can foreclose, same as your bank can. If you're already in trouble, the last thing you want is to be homeless.

On the other hand, when it comes down to paying the HOA or paying your car note, pay the car note. You can live in your car, but you can't drive your home. /evil-grin

Our experience is that the chronic non-payers are gamblers and don't pay until they absolutely have to. They don't see the value in paying their HOA fees. Water or electricity has a pretty immediate effect. With the HOA it takes months or years. They know that fees and penalties are adding up, but they think they can somehow negotiate those. Many of these people even do the mortgage delay tactic - stop paying, wait for the mortgage company to catch up with them, wait until they almost get foreclosed, do a work out plan saying they will pay, don't pay, rinse and repeat. They can delay foreclosure for years.

If I look at the list of late payers, we have two or three that are always late or have just stopped paying all together. Once in a while we get someone who calls the office with a credible story and we will waive the late fees once or twice.

Our two biggest accounts both have liens. The largest one has a mental issue and refuses to pay bills until there are consequences. He is in the middle of a long court case involving his mother's estate and he doesn't even pay his attorneys until they sue him. He has the money - he just doesn't feel he owes anyone. We started foreclosure proceedings and he has set up a payment plan because he finally saw that we could take his house.

The other one has been sued many times for credit card debt. She went through foreclosure once about 10 years ago but was able to save her house. She also has other legal issues. I suspect we will have to foreclose on her.

I have sympathy for people who run into hard times and can't pay their bills. I don't have sympathy for people who know how to manipulate the system so the don't have to pay their bills. In our HOA, the people who manipulate the system are the majority of late payers.