Collection Policy

I posted a list of policies and procedures every HOA should have in place and it was suggested that we tackle each one separately; this is the first of them. All policies should be vetted by the HOA's attorney to make sure they comply with the CC&R's and any applicable State laws. Furthermore CA has specific regulations that require the HOA to publish some policies annually. The idea being if everyone posts theirs we can help HOA's without any to develop a Policy & Procedures manual. http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/81934/view/topic/Default.aspx

Let the Good Times Roll Homeowner's Association - Collection Policy

Billing Statements

Homeowners receive a coupon book prior to the Associations year-end. It is the responsibility of the owner of record to pay each assessment in full regardless of receiving a reminder notice. It is also the responsibility of the owner of record to maintain a valid address with the Association if different than their unit address. Homeowner accounts are assessed on the first of the month. A homeowner may review their account at any time during regular business hours of the Management Company.

Delinquent Assessments

Payments are due on the first (1st) of each month and are considered delinquent on the fifteenth (15th) of that month. If payment is not received within the 15 days of the stated due date, a $35.00 late fee will be assessed to the homeowners account.

If the account remains delinquent at thirty (30) days the homeowner's right to use the common amenities and vote in Homeowner Association matters is suspended.
If the account remains delinquent on the fifteenth (15th) of the second month, a $35.00 late charge is assessed and the homeowner is given ten (10) days to bring their account current. A $35.00 late charge is assessed each month thereafter as long as the account remains delinquent in assessments.

If the account remains delinquent for ninety (90) days the account will be turned over to the Associations legal counsel. Counsel will prepare and file a lien against the delinquent property; all legal fees and costs associated with filing the lien will be added to the amount delinquent and must be paid if full to have the lien released.

If the lien is not satisfied within sixty (60) days, the Board of Trustees may elect to foreclose on the lien to collect payment in full. During a foreclosure action, counsel will petition the court to the appointment of a receiver to collect a rental fee from the owner of the unit as allowed under ORC 5311.18(B)(2). Each rental payment a receiver collects during the pendency of the foreclosure action shall be applied first to the payment of the portion of the common expenses chargeable to the unit during the foreclosure action.

All collection and legal fees will be the responsibility of the homeowner.

Application of Monies

The Association shall credit payments made by a Unit Owner in the following order of priority:

(A)First, to interest owed to the Association;

(B)Second, to administrative late fees owed to the Association;

(C)Third, to collection costs, attorney’s fees, and paralegal fees incurred by the Association; and

(D)Fourth, to the principal amounts the Unit Owner owes to the Association for the common expenses or Enforcement Assessments chargeable against the Unit.
As specified in Section 8.13 of the Declarations and Section 5311.18(A)(2) ORC.

Returned Check Fee

Any check returned to the Association for any reason shall be assessed a Returned Check fee of $35.00 along with any fees charged by the Associations financial institution and shall be added to the amount due.

I think Glen's warning bears repeating: All policies should be vetted by the HOA's attorney to make sure they comply with the CC&R's and any applicable State laws.

For example, I noticed the policy posted by Glen states, "Counsel will prepare and file a lien against the delinquent property." While Ohio law requires the lien to be filed to be effective, most state laws based on the Uniform Condominium Act or the Uniform Common Interest Ownership Act provide that the recording of the declaration constitutes record notice and perfection of the lien. Accordingly, filing a notice of claim of lien is unnecessary and could expose the association's collection counsel to actions under the Fair Debt Collection Practices Act. It would be wise in these states if the association wants to record a notice of claim of lien to have the lien filed by the association's officers or the management company.

I think both posts by GlenL and RogerB are good examples of Collection Policy. I've checked ours and we are clear about when assessments are due and that late fees will be charged. But we seriously need to add in wording regarding how delinquent accounts are to be handled.

Loser...just go away.

Actually we just followed the law ORC 5311.18 I especially like section (B)(2)

5311.18 Lien for common expenses.

(A)(1) Unless otherwise provided by the declaration or the bylaws, the unit owners association has a lien upon the estate or interest of the owner in any unit and the appurtenant undivided interest in the common elements for the payment of any of the following expenses that are chargeable against the unit and that remain unpaid for ten days after any portion has become due and payable :

(a) The portion of the common expenses chargeable against the unit;

(b) Interest, administrative late fees, enforcement assessments, and collection costs, attorney’s fees, and paralegal fees the association incurs if authorized by the declaration, the bylaws, or the rules of the unit owners association and if chargeable against the unit.

(2) Unless otherwise provided by the declaration, the bylaws, or the rules of the unit owners association, the association shall credit payments made by a unit owner for the expenses described in divisions (A)(1)(a) and (b) of this section in the following order of priority:

(a) First, to interest owed to the association;

(b) Second, to administrative late fees owed to the association;

(c) Third, to collection costs, attorney’s fees, and paralegal fees incurred by the association;

(d) Fourth, to the principal amounts the unit owner owes to the association for the common expenses or penalty assessments chargeable against the unit.

(3) The lien described in division (A)(1) of this section is effective on the date that a certificate of lien in the form described in division (A)(3) of this section is filed for record in the office of the recorder of the county or counties in which the condominium property is situated pursuant to an authorization given by the board of directors of the unit owners association. The certificate shall contain a description of the unit, the name of the record owner of the unit, and the amount of the unpaid portion of the common expenses and, subject to subsequent adjustments, any unpaid interest, administrative late fees, enforcement assessments, collection costs, attorney’s fees, and paralegal fees. The certificate shall be subscribed by the president or other designated representative of the association.

(4) The lien described in division (A)(1) of this section is valid for a period of five years from the date of filing, unless it is sooner released or satisfied in the same manner provided by law for the release and satisfaction of mortgages on real property or unless it is discharged by the final judgment or order of a court in an action brought to discharge the lien as provided in division (C) of this section.

(B)(1) The lien described in division (A)(1) of this section is prior to any lien or encumbrance subsequently arising or created except liens for real estate taxes and assessments of political subdivisions and liens of first mortgages that have been filed for record and may be foreclosed in the same manner as a mortgage on real property in an action brought on behalf of the unit owners association by the president or other chief officer of the association pursuant to authority given to that individual by the board of directors.

(2) In a foreclosure action a unit owners association commences pursuant to division (B)(1) of this section or a foreclosure action the holder of a first mortgage or other lien on a unit commences, the owner of the unit, as the defendant in the action, shall be required to pay a reasonable rental for the unit during the pendency of the action . The unit owners association or the holder of the lien is entitled to the appointment of a receiver to collect the rental. Each rental payment a receiver collects during the pendency of the foreclosure action shall be applied first to the payment of the portion of the common expenses chargeable to the unit during the foreclosure action.

(3) In a foreclosure action the holder of a lien on a unit commences, the holder of that lien shall name the unit owners association as a defendant in the action.

(4) Unless prohibited by the declaration or the bylaws, following a foreclosure action a unit owners association commences pursuant to division (B)(1) of this section or a foreclosure action the holder of a lien on a unit commences, the association or its agent duly authorized by action of the board of directors, is entitled to become a purchaser at the foreclosure sale.

(5) A mortgage on a unit may contain a provision that secures the mortgagee’s advances for the payment of the portion of the common expenses chargeable against the unit upon which the mortgagee holds the mortgage.

(6) In any foreclosure action, it is not a defense, set off, counterclaim, or crossclaim that the unit owners association has failed to provide the unit owner with any service, goods, work, or material, or failed in any other duty.

(C) A unit owner who believes that the portion of the common expenses chargeable to the unit, for which the unit owners association files a certificate of lien pursuant to division (A) of this section, has been improperly charged may commence an action for the discharge of the lien in the court of common pleas of the county in which all or a part of the condominium property is situated. In the action, if it is finally determined that the portion of the common expenses was improperly charged to the unit owner or the unit, the court shall enter an order that it determines to be just, which may provide for a discharge of record of all or a portion of the lien.

Effective Date: 07-20-2004