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 HOA & Condo 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 & Condo Collections are so important.
Collect Overdue HOA and Condo Fees Fast
Taking action sooner rather than later on the matter is a must. You are doing a service to the delinquent owner because the sooner resolution comes the better for all parties. Axela-Collections has designed a HOA & Condo Collections platform that enables community associations to recover more money quicker.
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” NOT a “collection’s solution.” You can lien and foreclose in order to rent, but that may not be the best for the association. Especially if the bank is right behind them to foreclose you lose money for expensive rehabilitation. Also, do you want your association to be a rental community?
• Talk to a HOA & Condo Collections Specialist: HOA and Condo Collections firms work on a merit based relationship. That means their interests are aligned with the association’s interests. HOA & Condo Collections firms should only benefit when the delinquency is resolved. Any fees they recover should come from the delinquent owner and NOT from the good paying owners in the association.
Consider the following Regarding HOA & Condo Collections:
– Attorneys do not make outbound collections calls, HOA & Condo Collection Agencies will do that.
– Only HOA & Condo Collection Agencies report delinquencies to credit bureaus.
– HOA & Condo Collection agencies specialize in working with community associations and 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 to rental residents. Don’t make it easy for a delinquent investor to rent their unit.
• 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 & Condo Collections.
Some do’s and don’ts of HOA & Condo 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. A keystone for Condo & HOA collections are effective payment plans that are managed by a collections company.
• Cause a Lien to be filed on the property: This can be done by your community association collections agency who will cause a lien to be placed by an attorney at their cost and risk. Liens protect the interests of the association. Have a professional HOA & Condo Collections company manage that process for you.
• Should we sue the Homeowner for monetary damages? 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.
Your Call To Action:
Axela-Collections powered by Axela-Technolgies will integrate with your property management software and automate the processes. We employ highly trained and accredited customer service representatives. Our proprietary collections platform is designed to be transparent so that boards of directors and management companies can easily see what is happening. Consider the current methods you have been using and think about a change. Is your community association attorney focuses on collections? Make collections a history NOT a mystery. Contact us right away regarding HOA & condo collections and see how the recovery can begin today.