Slow Collections by Attorney

MaryM59 (Texas)
Posts: 11

Posted:

I understand that there are laws governing HOA collections of past due assessment and fees. It seems as though our collection rate via our attorney's office is quite low. I know that payment of such debt is prioritized by the age of the past due accounts. Our Association is owed $145,000 because of past due assessments, fines, and resulting legal fees. I am arranging for our board to speak directly to our attorney about all of this. If you're in this situation, what specific questions are you asking the attorney? Thanks!

BillH10 (Texas)
Posts: 1,217

Posted:

Mary

There are several considerations:

1. I would first obtain and understand the association collection policy. It should describe the steps, and timelines, to be followed.

2. I would direct my questions to the President of the Board. It is the responsibility of the Board to manage the collections process. If the Board is satisfied with the work of the attorney and the collections rate, the problem resides with the Board. If there is a problem.

3. In Texas the traditional leverage tools for collecting on past due accounts are first to lien, then foreclose. However, foreclosure can only seek to collect past due assessments and no other past due charges--late payment charges, attorney fees, out of compliance charges, past due interest, etc. If the $145,000 is largely related to fees and charges which are not past due assessments, there is little the attorney can do once the lien stage has been reached and the lien filed.

What is your role in this scenario? Are you a board member or simply an owner. I suggest again you obtain a copy of the association collections policy. If you do not, you may wind up making a public spectacle of yourself.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By MaryM59 on 11/05/2025 1:44 PM
I understand that there are laws governing HOA collections of past due assessment and fees. It seems as though our collection rate via our attorney's office is quite low. I know that payment of such debt is prioritized by the age of the past due accounts. Our Association is owed $145,000 because of past due assessments, fines, and resulting legal fees. I am arranging for our board to speak directly to our attorney about all of this. If you're in this situation, what specific questions are you asking the attorney? Thanks!

You have big issues.

You don’t need to speak to your attorney, you need a new attorney. Ideally a law firm that specializes in HOA matters and collections. You well past time to be placing liens and foreclosing on units. It’s gong to take 18 months to clear this mess up.

Funny how people find money when they are about to be homeless or an landlord is losing his investment,

SheliaH (Indiana)
Posts: 6,964

Posted:

Bill and Dean have good ideas - i was treasurer for 5 of the 14 years I served and saw just about everything.

It's good to have an attorney who specializes in HOA collections, but you also need to know how people game the system because that's a big reason these folks keep doing what they do. They know the system doesn't run as fast as people think and take advantage of that - and I'm not just talking about the investor landlords.

Before you have this conversation, do your homework. You and your colleagues should already know the story behind the numbers - how many accounts, how many have liens on the property, who's on a payment plans (if you offer this), who's in bankruptcy (chapter 11 and 7), whether a proof of claim been filed, has the mortgage company filed it's own liea (they'll get paid before you because they have a secured interest).

And so on. If you don't have this information, why not? That's part of the management package our board gets to prepare for board meetings, so if necessary, fix that immediately.

Next, look at your collection policy with the attorney to see if something needs to be changed. Maybe you're taking too long before turning the account over to collections or people continue to bail on payment plans. Perhaps you haven't made it clear to homeowners THEY will be responsible for all the association's court costs, attorneys fees and other collection expenses. When people see that a $1500 delinquency can double or triple very quickly, that could motivate them to cooperate.

Do you know how much you're paying in legal expenses? Get an account statement with a detailed breakdown. If you have a letter of engagement with the attorney, take a close look. Remember you're paying for the attorney's skill and time, so if you and everyone else keep running to him or her with questions that are easily answered if you bothered to review the account or collection policy, of course you'll pay for every fax, phone call or email. To save money, you might start by designating ONE person to communicate with the attorney. Dean suggested the president, but the treasurer can also do this. I would email my colleagues with the questions and answers so everyone knew what was going on.

So those are some places to start. There are no silly questions, so if you really don't know, speak up. Your colleagues may not know either and will appreciate you bringing it up because they were afraid to (or had the wrong answer all along and don't want to admit it). Good luck!

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

TimB4 (Tennessee)
Posts: 21,061

Posted:

With that much owed, you need to foreclose.

Tell the attorney you desire to foreclose and ask how long that will take.

DeanJ
Posts: 1,786

Posted:

Also if you live in a community with $145K in outstanding assessments,, your HOA needs to get out of the payment plan business or minimally have the HOA attorney handling these 100%. No communications verbal or written with any statements or terms coming from the HOA.

TerriS6 (California)
Posts: 3,284

Posted:

Big mistake to hire an attorney for collections - unless, of course, you want to crush your neighbors with attorney fee debt they can never recover from.

TerriS6 (California)
Posts: 3,284

Posted:

Big mistake to hire an attorney for collections - unless, of course, you want to crush your neighbors with attorney fee debt they can never recover from.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By TerriS6 on 11/07/2025 12:19 PM
Big mistake to hire an attorney for collections - unless, of course, you want to crush your neighbors with attorney fee debt they can never recover from.

I understand the need to work with an individual, if possible, prior to the issue going to an attorney.

There are specific procedures that must be followed in perfecting the lien and, if need be, foreclosure of the lien.
If one step is done incorrectly, the process has to start over and (in my opinion) it's best to hire someone who lives those procedures.

We had one individual in my last association who refused to respond to our communications until an attorney was involved.
It cost them more money, but that appeared to be their choice as, once legal action was started and the account brought up to date, they would force the process to start over by not making payments and not responding to communications.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TerriS6 on 11/07/2025 12:19 PM
Big mistake to hire an attorney for collections - unless, of course, you want to crush your neighbors with attorney fee debt they can never recover from.

They could just go to a commercial lender and get a loan to pay the over due assessments, but it’s likely they don’t qualify.
Since you know more than commercial lenders, you could just loan them the money yourself Terry. That way they wouldn’t be crushed.

TerriS6 (California)
Posts: 3,284

Posted:

Dean is tickled pink that the filthy homeowners have to go into deeper debt because he couldn’t understand the small claims plaintiff instructions. The filthy homeowners couldn’t get another loan because Dean recorded an invalid lien on his property. I know the members are thrilled that you are off the board.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TerriS6 on 11/07/2025 2:51 PM
Dean is tickled pink that the filthy homeowners have to go into deeper debt because he couldn’t understand the small claims plaintiff instructions. The filthy homeowners couldn’t get another loan because Dean recorded an invalid lien on his property. I know the members are thrilled that you are off the board.

Can’t put the cart before the horse, there would be no lien if they hadn’t stuck their head in the sand thinking the HOA wouldn’t take action. It not the HOA job to financially rehabilitate anyone.

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By TerriS6 on 11/07/2025 12:19 PM
Big mistake to hire an attorney for collections - unless, of course, you want to crush your neighbors with attorney fee debt they can never recover from.

If your association has been able to collect delinquencies without involving an attorney and all the costs, congratulations, but many associations like mine didn't have that luxury. I realize you may find this hard to believe, but there ARE homeowners who will do damn near anything to avoid paying dedelinquencies.

Going to an attorney shouldn't be the very first step and most of the time it's not. But there comes a point when letters, emails and faxes are no longer enough. The association can send the nastygram but there has to be a response. What do you suggest the board do when there is no response?

It IS scary and embarrassing to say you're having financial issues and some associations have been downright boorish, and that's why communication on both sides is critical. If you say nothing, we have to assume you don't want to pay your fair share. If people are straightforward about their situation and make an effort to pay, I say do as much as you can to keep the money coming in. Half the time that worked in our community, but then there were the others...

I've said over and over - nothing the boards should ever be a surprise to homeowners. You have a right to know how much you have to pay, when it's due, where the money's going - and what happens if you don't pay. If people want to avoid liens, court costs and attorneys fees, either pay up or let us know what's going on so we can offer a payment plan. Everyone's situation is different and your payment history also plays a role. If you don't get offered a plan, you'll be told why and you can come up with a counter offer.

The HOA has to be run like a business. If your property manager doesn't do his/her job, you may need to get another one. If your attorney doesn't do the job, you may need to get another one. It's a pain, but it's not just about that homeowner- it's about everyone else who's also dealing with life and trying to meet their obligations as best they can.

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

JackieB4 (California)
Posts: 398

Posted:

Shelia, well-said, nicely explained. Thanks.
Jackie B.- CA

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By SheliaH on 11/08/2025 5:58 AM

Posted By TerriS6 on 11/07/2025 12:19 PM
Big mistake to hire an attorney for collections - unless, of course, you want to crush your neighbors with attorney fee debt they can never recover from.

If your association has been able to collect delinquencies without involving an attorney and all the costs, congratulations, but many associations like mine didn't have that luxury. I realize you may find this hard to believe, but there ARE homeowners who will do damn near anything to avoid paying dedelinquencies.

Going to an attorney shouldn't be the very first step and most of the time it's not. But there comes a point when letters, emails and faxes are no longer enough. The association can send the nastygram but there has to be a response. What do you suggest the board do when there is no response?

It IS scary and embarrassing to say you're having financial issues and some associations have been downright boorish, and that's why communication on both sides is critical. If you say nothing, we have to assume you don't want to pay your fair share. If people are straightforward about their situation and make an effort to pay, I say do as much as you can to keep the money coming in. Half the time that worked in our community, but then there were the others...

I've said over and over - nothing the boards should ever be a surprise to homeowners. You have a right to know how much you have to pay, when it's due, where the money's going - and what happens if you don't pay. If people want to avoid liens, court costs and attorneys fees, either pay up or let us know what's going on so we can offer a payment plan. Everyone's situation is different and your payment history also plays a role. If you don't get offered a plan, you'll be told why and you can come up with a counter offer.

The HOA has to be run like a business. If your property manager doesn't do his/her job, you may need to get another one. If your attorney doesn't do the job, you may need to get another one. It's a pain, but it's not just about that homeowner- it's about everyone else who's also dealing with life and trying to meet their obligations as best they can.

I don’t have issue with an owner on a payment agreement (plan), what I have issue with is the HOA board / PM offering, structuring and administrating the agreement. This should be handled 100% by the attorney and if the owner is performing to the requirements of the written agreement, they won’t be accruing additional legal fees. They still might be paying the late fees provided in the CC&Rs. If they fail to perform, a foreclosure will progress in a timely manor.

When this is done properly, the payment agreement supports the HOA if the issue goes to foreclosure. If the agreement is done improperly, the HOA finds itself in the middle of a discrimination action or an owner fighting a foreclosure claiming board members / PM made verbal offers/ agreements with the owner not to foreclose, provide more time, lower the payments ect.

And if none of that is compelling, no board member or PM should be required to listen to a dead beat owner trying to pull on heart strings to get more time.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By DeanJ on 11/08/2025 8:16 AM

I don’t have issue with an owner on a payment agreement (plan), what I have issue with is the HOA board / PM offering, structuring and administrating the agreement. This should be handled 100% by the attorney and if the owner is performing to the requirements of the written agreement, they won’t be accruing additional legal fees. They still might be paying the late fees provided in the CC&Rs. If they fail to perform, a foreclosure will progress in a timely manor.

The problem here is that most attorneys will insist that the payment be sent to them so they can track it for legal documentation.

This also incurs billable time. If the member isn't charged, then the association is.

In my previous Association, I've had attorneys inform us that they can not charge the member fees for some items and the Association had to pay.
In fact, over a ten year time frame, the Association had a net loss on that account of $1,469.

Therefore, if an agreement can be reached between the Association and the member, I'm all for it.
Once it's turned over to an attorney, I'm against payment plans (as paying the annual assessment in monthly installments is a payment plan).

MaryM59 (Texas)
Posts: 11

Posted:

Thank you all. I failed to state that I am a current board member until Feb, 2026. We do offer our owners the opportunity to pay assessment in full or pay quarterly installments which also include due dates. The Association does have a collection policy. After our management group exhausts the steps required before turning an account over to legal counsel, it is in the hands of the attorney. Homeowners are offered a payment plan. Multiple owners may ask the Association to waive late fees and legal fees. We will not waive legal fees and usually not late fees. There are just under 800 single family homes. Our amenities include a very nice pool area, clubhouse and several tennis courts. Our services include trash collect 2x/week, recycling x1, mosquito control, pool maintenance and lifeguards, landscape of all common areas. Our assessments are just under $600/year. The last raise in assessments was three years ago and it was $10. For FY 2026 we will raise it by 44 bucks. We have a health reserve of about $800,000. But in my opinion, it is unwise to meet monthly expenses by dipping into reserve cash.
Anyway, back to the collections...I want to ask informed, intelligent questions of our attorney regarding the unbelievable amount of old and current assessments due! Thank you for your help!

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By TimB4 on 11/09/2025 4:50 AM

Posted By DeanJ on 11/08/2025 8:16 AM

I don’t have issue with an owner on a payment agreement (plan), what I have issue with is the HOA board / PM offering, structuring and administrating the agreement. This should be handled 100% by the attorney and if the owner is performing to the requirements of the written agreement, they won’t be accruing additional legal fees. They still might be paying the late fees provided in the CC&Rs. If they fail to perform, a foreclosure will progress in a timely manor.

The problem here is that most attorneys will insist that the payment be sent to them so they can track it for legal documentation.

This also incurs billable time. If the member isn't charged, then the association is.

In my previous Association, I've had attorneys inform us that they can not charge the member fees for some items and the Association had to pay.
In fact, over a ten year time frame, the Association had a net loss on that account of $1,469.

Therefore, if an agreement can be reached between the Association and the member, I'm all for it.
Once it's turned over to an attorney, I'm against payment plans (as paying the annual assessment in monthly installments is a payment plan).

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“Plans” are typically offered after the owner is >90 days past due . They have been given more than 3 months to get on their feet and failed to do so. If the board decides to proceed to a lien and then to a foreclosure, the delinquent owner has many more months to cure their debt to the HOA.

I find it amazing how some would go ballistic if the HOA invested funds with sub prime investment companies, but accept verbal agreements with sub prime owners as good business.

SheliaH (Indiana)
Posts: 6,964

Posted:

Quote:

Posted By MaryM59 on 11/09/2025 7:52 AM
Thank you all. I failed to state that I am a current board member until Feb, 2026. We do offer our owners the opportunity to pay assessment in full or pay quarterly installments which also include due dates. The Association does have a collection policy. After our management group exhausts the steps required before turning an account over to legal counsel, it is in the hands of the attorney. Homeowners are offered a payment plan. Multiple owners may ask the Association to waive late fees and legal fees. We will not waive legal fees and usually not late fees. There are just under 800 single family homes. Our amenities include a very nice pool area, clubhouse and several tennis courts. Our services include trash collect 2x/week, recycling x1, mosquito control, pool maintenance and lifeguards, landscape of all common areas. Our assessments are just under $600/year. The last raise in assessments was three years ago and it was $10. For FY 2026 we will raise it by 44 bucks. We have a health reserve of about $800,000. But in my opinion, it is unwise to meet monthly expenses by dipping into reserve cash.
Anyway, back to the collections...I want to ask informed, intelligent questions of our attorney regarding the unbelievable amount of old and current assessments due! Thank you for your help!

I don't think you need suggestions on what to ask - you have a better handle on this than you think. Start with what's bugging you the most and build from that. For example, you said you don't waive legal and late fees. I wouldn't waive legal fees either but why not ask the attorney what sort of incentive the homeowner must meet before the board considered that? How about bringing the account completely current within 90 days or comply with a payment plan consistently for 6 months and be within 90% of the delinquent balance paid?

For the accounts in bankruptcy, has the attorney attended the hearing and tell the judge how many times this homeowner has become delinquent, failed to comply with payment plans, etc? That may persuade the court to compel the homeowner to take this more seriously or the petition will be dismissed and then the hounds are released.

Once again, look at the accounts (start with the oldest ones) and prepare your questions. Look at what comes up over and over, and put that on your list of things to discuss. All of the board members should do this because they may come up with something no one's considered. That's where your discussion can evolve.

But first, have the attorney discuss his/her observations and suggestions about your colpection policies. Everyone should know what's in it and if they don't, this is where those questions are asked for clarification

PS- you absolutely SHOULDN'T be dipping into reserves to pay shortfalls in the operating budget. That's not what reserves are for, so stop it. Take a hard look at your income/expense statements for the last 3-5 years and see what line items have increased the most and ask why. We know master insurance has increased everywhere, but perhaps the association will need to turn recycling over to the homeowners? It's OK to say the association has to made some service reductions until the delinquency issues are resolved - maybe that will give delinquent homeowners some motivation to fix their issues.

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

ElleN (Idaho)
Posts: 1,336

Posted:

Quote:

Posted By TimB4 on 11/06/2025 8:23 AM
With that much owed, you need to foreclose.

Tell the attorney you desire to foreclose and ask how long that will take.

I read the whole thread. I agree with TimB4 and also having a collections specialized attorney. Nothing else will do.

The Board identifies the owner who owes the most and starts foreclosure with him or her.

From experience with this approach: People will start paying up.

ElleN (Idaho)
Posts: 1,336

Posted:

Quote:

Posted By BillH10 on 11/05/2025 5:42 PM

3. In Texas the traditional leverage tools for collecting on past due accounts are first to lien, then foreclose. However, foreclosure can only seek to collect past due assessments and no other past due charges--late payment charges, attorney fees, out of compliance charges, past due interest, etc. If the $145,000 is largely related to fees and charges which are not past due assessments, there is little the attorney can do once the lien stage has been reached and the lien filed.

I have doubts about this. See https://kmd.law/dont-just-ignore-your-hoa-assessments-in-texas/

MaryM59 (Texas)
Posts: 11

Posted:

Just to clarify, our quarterly payment plans are for current year assessment. Owners may pay in full by January 31 or they may opt to pay quarterly requiring a signed form.current assessments may be paid online, hand delivered or sent thru USPS. Again quarterly payments also have due dates.

We do have a collection policy. After management company has exhausted "non-legal" avenues, it goes to legal counsel specializing in collections. They will offer a payment plan, which applies to the oldest debt first, then the next oldest etc. We don't offer a new payment plan to anyone who defaulted or had late payments on a previous plan. I used to think offering a settlement amount to those who ask for legal fee waivers, interest waivers and or associated late fees was the decent thing to do for an owner, but have found this simply draws things out further as these people know how to play the game! There are always hardship cases which we hear in our executive sessions.
But, it becomes ridiculous that the rest of the Association must carry the debt from their neighbors and our budget suffers because the Association is constantly being billed for legal fees. Been going on long before I was elected, but the proverbial "crap" has hit the fan!

Thank you all for your guidance and suggestions. Meet with Counsel on Friday morning. I've encouraged the rest of the board to study the collection policy, and review an informational email from the lawyer regarding their process. Thank you!

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By MaryM59 on 11/11/2025 3:06 PM
Just to clarify, our quarterly payment plans are for current year assessment. Owners may pay in full by January 31 or they may opt to pay quarterly requiring a signed form.current assessments may be paid online, hand delivered or sent thru USPS. Again quarterly payments also have due dates.

We do have a collection policy. After management company has exhausted "non-legal" avenues, it goes to legal counsel specializing in collections. They will offer a payment plan, which applies to the oldest debt first, then the next oldest etc. We don't offer a new payment plan to anyone who defaulted or had late payments on a previous plan. I used to think offering a settlement amount to those who ask for legal fee waivers, interest waivers and or associated late fees was the decent thing to do for an owner, but have found this simply draws things out further as these people know how to play the game! There are always hardship cases which we hear in our executive sessions.
But, it becomes ridiculous that the rest of the Association must carry the debt from their neighbors and our budget suffers because the Association is constantly being billed for legal fees. Been going on long before I was elected, but the proverbial "crap" has hit the fan!

Thank you all for your guidance and suggestions. Meet with Counsel on Friday morning. I've encouraged the rest of the board to study the collection policy, and review an informational email from the lawyer regarding their process. Thank you!

Your HOA is enabling and retaining non/slow paying owners. If they can’t afford to live in your community, they need to go. If they can afford to live in your community and opt not to prioritize payments to the HOA, you need to increase the discomfort level for slow and no payments and accelerate the process.

BryonW (Massachusetts)
Posts: 55

Posted:

Hi MaryM - the homeowners are lucky that you are finally going to tackle this problem!

If I understood the details correctly... your community has 800 homes * $600/year assessment = $480,000 annual budget
$145,000 / $480,000 = 30% delinquency rate.
YIKES!
(For reference, auto loan delinquency is at only 6.6% right now, and is considered "record high": https://thehill.com/homenews/5183840-late-car-payments-record-high/)

When questioning your attorney, my $0.02 is: treat them like an employee (politely). Get exact commitments about what action they will take, by what deadline.

Many times the dynamic between an attorney and client is that the attorney runs the whole conversation, and sweet talks you ("we are going to take great care of you, we have done lots of cases like this, etc"). But they don't give specific details. My suggestion is to ask a large number of the very simple "who, what, when, where" type questions to force them to come out of sweet talk mode, and give you a real plan:

"What document do you draft?"
"Do you need any details from us to draft the document?"
"What court is the case filed in?"
"When will you get it filed?"
"After filing, how long until the first hearing?"
Etc.

Don't be shy about asking a large number of questions, until they have given a plan with enough detail that you can supervise them like an employee.

DeanJ
Posts: 1,786

Posted:

Bryron,

With a 30% delinquency rate, I would be willing to speculate owners are having private discussions about their non payment, the HOA’s inaction and advising others they don’t need to pay either.