Collecting way past due assessments

Started by WesH1 • 5 replies • 1250 views

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WesH1 (Washington)
Posts: 2

Posted:

We have a rural HOA consisting of mountain forest property in Washington state with few full time residents and a board scattered across the state. The HOA was established and run by the developer from 2001 to 2006 when it was turned over to the members. No effort was made by the developer to collect past due assessments and the all volunteer board has hesitated to deal with the issue until this year.
As a result there have not been late notices sent out and no liens have been filed. Can we go back now and ask for those unpaid assessments an impose the late fees and interest charges as perscribed in our covenants?

KirkW1 (Texas)
Posts: 1,665

Posted:

First, my own opinion is that there are really two issues here. There is the legal one of what the law will allow, and the ethical one.

In either case I would say there are some unanswered questions before I even would begin to answer. To start, were the original bills sent out? Did the HOA provide services and continue as an active organization?

IF they did, then I think you have a good reason to go back and demand the dues be paid up. Chances are that there is a statute of limitations on how far back you can take actions against. For instance, in Texas while you can continue to contact the person for collections, you lose rights to file suits, and liens when the debt is more then four years old. But that is Texas and I would have no idea what the laws in your state are.

You can probably find a competent attorney who can help you through this mess without a large expenditure up front.

WesH1 (Washington)
Posts: 2

Posted:

The HOA did and does continue to perform service. Primarily this involves road maintenance and snow removal. The annual billing has taken place every year but there has only been follow up late billing done last year and this year. For the ethical part of the question the board has sent out letters to all delinquent members with their payment records, a copy of the related covenants and bylaws and extended a grace perioed to catch up without penalty. A number have caught up, a couple have questioned records and quite a few have ignored it as they have ignored past billings. Soon the decision will have to be made on how to deal with the rest. I will be putting the question to an attorney but thought it would be interesting to see what experience has to tell.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Wes,

IMO, the board could send a letter to all members of the assn (not just the delinquent ones) and let them know that the board will no longer be lax in collecting delinquencies. Attach a copy of the board adopted collection policy and state it will be followed to the letter. If the board does not have a collection policy, I suggest they adopt one NOW. State that the board will not charge any late fees or penalties for delinquent assessments prior to the date of this letter (or whatever date the BOD feels is fair). Also state that any delinquencies that occured while the declarant was in control will be written off as bad debts. Payment plans will be considered. Let the members know that the board cannot afford to let delinquencies go unnoticed any longer -- these monies are needed in order to run the assn effectively.

KirkW1 (Texas)
Posts: 1,665

Posted:

In checking the web, I found that in your state you can take action (beyond letters and calls) on debts as far back as 6 years. But if you have debts that old, you really do need to start moving on this problem.

I would be inclined to tell all people that effective a certain date you will start placing a lien on any house that is more then a year in arrears. You could follow that with a note to warn those who will be facing this action. Then take the actions.

My own feeling is that given the lax efforts int he past, I would be inclined to waive any penalties and interest that are allowed if the people bring themselves current by the date you decide to start filing liens. I would also plan to take payments from those who don't have the money right available (and tell people that you will do so in your letters).

RobertR1 (South Carolina)
Posts: 5,164

Posted:

I agree with most of what has been said. I would temper any attempt to back collect with an accounting of what the money is needed for, plus what is owed and needed to re-establish the HOA again on firm economic footing. Try to be fair, and don't ask for something you need, itemize what you need what for and send out bills to get it. I doubt I or anyone else is going to be able to tell you what is fair, but it is important, knowing full well there there is fair, and their is fair, and not so fair.

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