collecting deliquent association dues

MargeS,
If you have hired a lawyer to place a lien, there must be some hope of collection. What does your lawyer say? With 44 homes and a HOA what are your dues and what does the association maintain?

Curently on this discussion Board is one titled noisy neighbors. You might find the posting there by Judy that explains the Board duties as far as civil matters are concerned in condos. I don't know if this would be relevant o your situation or not. I also believe Maryland has some fairly new HOA/condo laws on the Books, but I imagine your lawyer would be aware of them.

1) Do you have Rules on Collection of Delinquent Accounts? If not develop them and distribute to all owners.
2) Have allowable late charges, interest, and lien filing fees high enough to encourage payment before paying other bills.
3) Educate owners on the HOA's right to file a lien, garnish of wages, foreclosure on their home, and collect for all costs including legal fees and court costs.
4) During these difficult times work with the delinquent owners. Contact them personally and ask them to come to a Board meeting and talk with the Board about setting up a payment schedule to help reduce their costs.
5) Have an experienced PM do collections rather than an attorney. The high charges of attorney only exaserbate the financial problems of an owner who is already delinquent.

Thank you for your reply
From what I understand the is a warrant out for the husband and wife because they are in contempt for not showing up at the hearings. The police will not arrest them unless there is another more pressing reason. The homeowners are sent the policy by the attorney when they default. We have about 10% in default. One resident we are targeting is $3,000 in arrears with passed dues,acceleration dues and attorney fees. They purchased a new motorcycle, remodeled a kitchen, etc. But don't seem the least bothered by the many notices. There are two homes that have gone to foreclosure by banks but we are told not to expect our money because the bank is the first lien holder and there are doubts they will get all their money due.

Marge,

You stated the h/o's are sent the policy (collection policy I presume) when they default. IMO, they shoud be sent the policy NOW. Waiting until they default is part of the problem. The H/o's must know in advance what is going to happen if they fail to pay their assessments on time. They also need to know that the board will follow the collection policy to the letter.

The resident with $3,000 in arrears should have been liened a long time ago. He must be upwards to 5 years delinquent ($49/mo)!!! When a h/o is 3 months in arrears it's time to lien the property. There may be state laws to abide by regarding when foreclosure can take place. In AZ the h/o must be $1,200 in arrears or in arrears for one year whichever comes first.

The fact that delinquent assessments cannot be collected when the home is foreclosed by the bank seems to be a common occurence all across the country. What many assn's are doing to deal with that is including a line item for bad debts in the budget. That way money will be budgeted for those uncollectible amounts and the assn won't be put into a difficult financial situation. Your assessments may need to be increased to cover this expense but it's just something that cannot be avoided. Those who pay on time always carry the slack of the delinquent members.

The member who hasn't shown up for the hearings needs to have a rude awakening! That would be getting a letter telling him his home is being foreclosed upon! Sometimes you just have to fight fire with fire. It's not uncommon for the police to NOT go after someone with an outstanding warrant. Usually they just wait for them to be stopped for a traffic violation. Perhaps, in the dead of night, you could knock out the tail lights on their car! LOL Just kidding of course!!

Foreclose as soon as possible. Getting someone new in the unit who "will" pay the monthly dues is job #1. Actually getting the money from the old deadbeat owner is secondary.

In our 64 unit development in NM we have a similar problem. The delinquent owners however, live elsewhere. We have filed some liens and are in the process of filing at least 6 more this week. Approximately 12 out of 58 owners are behind 6 months in dues. The total amount is about $4,000.00 with the current quarterly dues added.
We have discussed with our attorney, and he will try to obtain judgements against some or all of these folks, but with very little money to spend, how far can we go in the foreclosure process? The owner who is the furthest behind in dues is actually another attorney here in town and apparently well aware of what we can and can't do legally. I think it will only worsen as more folks lose their jobs and then the HOA will have no choice but to cut services if we can't pay the bills.

Next month if they have not satisfied their debt we are going to publish the delinquent homeowners and warn them that If they do not pay up will tow any car parked in their numbered spot and their parking pass will be reported to our towing company as invalid and the vehicle it is displayed in will also be towed. The parking is on association property. Our covenants say we can limit use of recreation areas (We are going to stretch the covenants a bit to include parking).

I want to thank everyone who has replied. It has been a great help to hear from people facing similar problems. Has anyone ever thought to challenge the municipality? Home owners are paying taxes for services they are denied by the county. We should at least have our roads cleaned and maintained by the county or our taxes reduced.
MargeS

Marge and Mary,
I think Marge meant they were going to publish the names to punish the offenders.

Sorry about this Marge for the attempted humor.

When we give opinions here we try very hard to stay away from anything personal and just try and give a considered opinion, personalities aside. To you I would like to say, I admire your enthusiasm and your directness and your obvious concern. But, you are flying a little fast and two low to the ground and someone is going to shoot you out of the sky. Mary's post alludes to this indirectly. There is no doubt that HOA's need many more people like you, I sure know you would be welcome in my Condos. I guess I am trying to say, the best way to effect change in your association is little by little. Why? Because there is to much that has to be considered when you start making changes. One, change is never accepted by all, you mention change, you get resistance. Two, document changes are full of pitfalls and holes you can fall into. Three, there is always some waiting to prove you wrong....always.

So, take baby steps and little bites over time. Understand you are not going to win them all, get used to getting up and joining the battle again, and if there is one that is prime, really know more than the people you are trying to change and teach. Digest your documents, and NEVER come out swinging in your association without support. SUPPORT has to be there, that is a tough job.

I would support your stand on rentals in my condo complex, I don't think you have a chance in an HOA. But for a rental band to occur you will need more than a majority, you will need to change the neighborhood over a long period of time. But you can, with education, persistence and support maybe get a rental Policy added to the documents. A huge task.

Hope I am not sounding like the old man I am.