HOA & Condo Association Collections: How to Collect Unpaid Fees

As part of a community association, it’s common to encounter those one or two owners (or more) who don’t pay their community association fees. Unfortunately, the repercussion of those owners who don’t pay affects those who do. Reliable paying members of an association could face increased fees, special assessments or reduced spending on community maintenance and amenities. Usually in this situation the community association has to enforce the condo association collections policy to establish consequences for continued non-payment.

The Cost Of Delinquency

Non-payment of community association fees is a top nationwide problem facing condo, single-family and other planned development associations today. It just takes a few homeowners who stop paying their HOA or Condo fees to cut deeply into an association’s budget. In addition, lenders may be unwilling to make mortgages or refinance properties in the community. That is why HOA Collections are so important.

Collect Overdue HOA and Condo Fees Fast

Taking action sooner rather than later on the matter is a must and not only does a service to the association but to the delinquent owner because if you let them dig themselves into a deep hole of debt they will never be able to get out. Axela-Collections powered by Axela Technologies has designed a condo collections & HOA collections platform that enables community associations to recover more money on delinquent accounts than any other solution in the industry.

How to Go About Collecting Overdue Fees?

If you are a member of an HOA or Condo board that has delinquencies, we recommend that you consider the following:

• An Attorney is not always the right course of action: Consulting with your community association attorney and he/she will direct you to a “legal solution” which is NOT a “collection’s solution.” You can lien and foreclose in order to rent, but that may not be the best decision for the association. Especially if the bank is right behind them or if the unit requires expensive rehabilitation. Also do you want your association to be a rental community?

• Talk to a HOA Collections Specialist: Collection firms usually work on a merit based relationship that requires them to perform and collect so that their interests are aligned with the association’s interests. They should only benefit when the delinquency is resolved, and the fees they recover should come from the delinquent owner, foreclosing bank or third party purchaser and NOT from the good paying owners in the association.

– Condo Collection Agencies make outbound calls that attorneys do not.
– HOA Collection Agencies can report delinquencies to credit bureaus which attorneys do not.
– Collection agencies that specialize in working with community associations charge fees that are passed on to the delinquent owner at no risk or cost to the association. Attorneys always get paid no matter what the result.

• Suspend the Right to use Amenities: This should your first step that any and every board of directors in Florida is entitled to do unless it is prohibited in the governing documents. It pertains not only to a delinquent owner but is especially helpful if the home is occupied by rental residents who are likely to complain to the landlord about not being allowed to utilize the community amenities.

• Enforce renters to pay rent if their Landlord is delinquent in fees: There are laws in Florida that allow an association to intercept the rents from a renter if the owner is delinquent. Associations even have the power to evict a renter if they do not pay the rent to the association directly. Your condo association collection specialist can help the association with that. This law is also applicable for HOA Collections.

• Offer a Payment Plan: Some homeowners may experience financial stress, which could make it harder for them to pay the fees. A Condo or homeowner’s association could come up with a payment plan consisting of monthly installments for either a six or a 12-month plan. Payment plans should be laid out and explained in a written agreement. Any other payment to the association is not a payment plan but rather just a donation to the association.

• Cause a Lien to be filed on the property: For those who are unfamiliar with a lien, it is a court document that tells title companies the HOA or Condo has to be paid when the property is sold or the homeowner refinances his mortgage. This can be done by an attorney or by engaging a community association collections agency who will cause a lien to be placed at their cost and risk.

• Sue the Homeowner ?: Suing the owner for unpaid maintenance fees in order to garnish wages or bank accounts, as mentioned previously, could cost thousands of dollars. It may sound beneficial to take the case to a small claims court in your area but it seldom brings any money to the association. There are costs associated with this procedure and time spent in small claims court. Then should you succeed in getting a judgment consider how you will enforce it. It’s not easy to garnish wages in Florida which is a debtor friendly state.

Axela-Collections powered by Axela-Technolgies will integrate with your property management software and automate the processes. Our proprietary collections platform is designed to be transparent so that boards of directors and management companies can easily see what is happening with their community association collections files. Make collections a history NOT a mystery. Contact us right away regarding HOA and condo collections and see how the recovery can begin today.




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