Foreclosure and past due assessments

In most states - GA would be a mortgage holder state, whereas NV is a title holder state - the HOA can file a lien on the property. Usually with the unit owner - then again with the foreclosing entity (the bank). I would suggest that your HOA talk with a collection agency, and/or attorney as to the rights and responsibilities you have to the unit owner and to the association. Additionally you can do some research on Title 44 on http://www.lexis-nexis.com.

Generally, we as board members are not required to be experts in all areas of HOA life and it is best to "seek safe harbor" in the advise of experts.

In this forum previously, the following advise has been given: You may want to do your own search of the site to find more suggestions.

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Questions to ask an attorney or collection agency when you are considering seeking their services in a collections issue:

Some of the things you need to discuss as a board are what message is appropriate to send to your home owners - a community with Million dollar plus homes - I would use a lawyer, but a community with homes 1/10th the price - a lawyer may appear to be excessive - but only your board knows the situation - high foreclosure rate - a lawyer may be the best to deal with the lending institutions. What message is your board trying to send?

Next question to answer: What will it cost the association? Some collection cost are billed to the homeowner, some may be to the association - depending on the level of collection/foreclosure you are going to. Our association, also shopped the fees they charge, because we did not want to send the message to our homeowners that we were trying to add pain to their situation. We just wanted the assessments for their share of the expenses.

3rd question: What do your state laws require (sorry should have started there). There may be specifics to your state regarding the language that must be in letters. - And look at the sample letters, what is the tone - what message is your board trying to send, do the letters match the tone? If the account needs to go to court for garnishing wages or foreclosing on the property is an attorney required?What steps do they take to document the process?

4th question: Give me a reference of the last three associations’ collections transactions your firm/company completed - not your favorites, just the last three.

5th question: Do they offer free training for the board regarding collections including the national fair debt collections act. What to write and publish to the homeowners regarding a collections policy. It is critical for the Association to have a good collection policy and all owners have been provided a copy. What is the difference between judicial/non judicial foreclosure. What a board can and should do in bankruptcy situations....The list goes on, but the point is, they should train the board and manager, because once the contract for collections is signed - the board and manager may be required to have no contact with the owner regarding the collections, and you all need the same message.

Question 6: Follow the money - when does the association get paid.

Question 7: What is their rate of return on collections - how long is the aging on their accounts when they receive them, and how long to completely clear the account.

Question 8: What is the percent that are closed after the first letter, second letter etc.

Question 9: What percentage go to notice of sale and sale.

Collection agencies might be less expensive that an attorney initually but when they get no results, then it has to go to an attorney anyway some HOAs just skip the middleman of an agency but each State is different.

Here in Fl. the HOA is last to collect any monies. But you should file forms with your lawyer, in case any money is left after sale of property.