If left unchecked, delinquencies can become a big problem for your association. It isn’t unusual for someone to miss a payment or two, but when left unaddressed these debts can swell and cause major (but not irreparable) harm to your community. Collecting HOA delinquencies from your neighbors can be an uncomfortable task but allowing dues to go unpaid out of some misguided sense of kindness will only make the problem worse. The accounts receivable of a community association should be available to all owners, and if it gets out that someone isn’t pulling their weight, tensions can rise.
By: Mitch Drimmer, CAM on HOA & Condo Delinquencies
Managers and board members require a lot of information to be processed to govern well. Everything from water consumption to the amount of parking spots available. Your monthly budget comparison is critical and allows you to take actionable decisions. Yet, many managers and board members are in the dark regarding their delinquency situation. If a unit goes delinquent, you send them to a collection solution (ie. Lawyer or Collection Agency) and that’s good. But what do you know about your delinquent units and what position they are putting your association in? Regarding HOA & Condo Delinquencies, getting in front of the problem goes a long way to preventing a special assessment.
When interviewing a Community Association Collections solution provider for an association, the first question by the board of directors is: “How long is your contract for?” For most vendors there is an beginning and an end to their job, but for a collector this is harder question. It is almost impossible to predict because it depends exclusively on when and how the delinquent unit “settles out.”
Before we discuss the various ways a delinquent unit “settles out” let’s define what the term means. Simply put, when a unit ledger has a zero balance a unit is considered is “settled out.” That is Community Association Collections success.