Serious Delinquency

Started by JoanneD1 • 2 replies • 962 views

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JoanneD1 (Arizona)
Posts: 447

Posted:

I recently was elected to the board as secretary/treaurer. Fiscal oversight in my HOA was deplorable and recently the past treasurer was removed for deriliction of duty....not signing checks, not viewing bank records etc. New BOD is just begining to peel back the layers of our financial status when we learned that an owner who had been delinquent in funds large enough to be forclosed upon, was offered a PAYMENT plan to reimburse the HOA. If course, now the owner has defaulted after making a couple of the payments and has been WARNED that if payment is not received by end of the month, a lien will be filed. DID THE BOARD HAVE THE AUTHORITY TO SET UP THIS PAYMENT PLAN? The management company was also aware of this, but the agreement was signed on our HOA letterhead and by the BOD!

MaryA1 (Arizona)
Posts: 7,043

Posted:

Joanne,

Unless your gov docs explicitly prohibit payment plans, I see no reason why the BOD cannot go this route to collect a delinquency. In fact, especially in these tough economic times, a payment plan may be the best route to take. No BOD should ever want to enter into a foreclosure and should only pursue that method as a last resort. Of course, regarding this particular member, I would be advising him that if he fails to make any more payments on the payment plan the board will start foreclosure proceedings. However, you will want to make certain you are in compliance with AZ law -- the assessment delinquency must be for at least $1,200 or for a period of one year, whichever comes first. (Ref ARS 33-1256)

SusanW1 (Michigan)
Posts: 5,202

Posted:

The Board needs to develop step by step policies for a payment plan IF your documents even permit it (which should, especially in this economy) These steps should include when the h/o defaults on the payment plan.

By having an objective, step by step procedure, it takes all the emotion and ambiguity out of it.

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