HOA Dues

Seriously, our HOA can not pay their water, sewage, trash bills because 5 units out of 12 are delinquent in their dues. They are delinquent more than 3 to 12 months. Liens have been placed on units, yet their has been no response. I have investigated turning off water to each unit that is delinquent put that is not plausible. Does anyone have any other suggestions? Does a collections agency or foreclosure have any benefits over the other? I am so frustrated with irresponsible owners but that does not pay our bills.

Denise

Good info, Roger. I would add, however, that the governing docs must be consulted to see if there already exists a collection policy and if late fines/etc are allowable. Seeing how often you post, I know you were thinking that!

Denise - I'm in a 19 unit townhome complex, and we have two owners who are GROSSLY overdue on dues ($900/year). We've just developed a Debt Collection Policy, and I'm implementing it slowly. One owner has agreed to a repayment plan. He agrees to be completely paid up by July 1, 2010, or the association will file a lien (he's waived the 30/60/90 day letter policy). The other owner is an older lady with dementia (moved away from Colorado), and her family is squatting in her house and not paying her rent or paying assessments (which, of course, are not the responsibility of anyone other than the owner). This one, I'm just going through the policy, and I'm ready to send out the 60 day letter (I sent a 30 day, will send a 60 day, will send a 90 day, and then the lien is filed.) I MAY contact an elder services agency in the city she lives in now, to see if someone will try to protect her rights. I need to protect the rights of the HOA, but her rights also need to be protected, along with her asset.

Oh, and I'm not in your exact situation, because these two owners are not impacting our ability to pay bills. Just impacting our ability to save money.

Good luck. I know there have been posts about using collection agencies versus a lawyer versus trying to collect yourselves. Search them, and then see what your docs and the state/county/local statutes say. Develop a policy, and stick to it (while allowing for individual circumstances). The one owner who's late was in a really bad car accident with no health insurance. A bit of leniency for him (he's owned his unit for over 10 years) is appropriate in his situation. I will NOT recommend foreclosure of his unit until all other options have been exhausted.

good advice so far: two more pieces to add (not in lieu of)

SMall Claims courts might be a viable option at a low $$$ level, and get a judgement and garnishment order. You still face actually collecting money, but it's a step. Perhaps just hit them for one year (to meet the lower $$ court limit) and get a judgement. Garnishing often wakes them up.

If you turn over to a collection agency, you absolutely come under a set of federal laws regarding debt collection/privacy. Once you do that, be absolutely sure you get a REPUTABLE agency, and that you and the board absolutely know the law, and what you can/cannot do and say. THat's the Fair Debt COllections Act, I think (i am writing this from memory, without my resource book at hand.. hopefully if i labelled the law wrong, someone will correct me).

You are correct Mary, but after turning over to a collection agency, an HOA Board member that, say, calls the HO to "chat" about the bill may be breaking the laws.

There's a set of rules for collecting debts as a first party, and there's a set of rules for collecting debts as a second party, and the HOA needs to be careful that once they involve a second party, they don't accidentally (or stupidly) cross the line and break a law by suddenly trying to collect, contact, or pressure the HO. Once you send the debt to a second party collector, the debtor has invoked a lot of rights, and a misguided HOA board/secretary/officer could bump into them.

that's what I was trying to say, and didn't.