The classic definition of a Zombie is “the undead.” That is to say a person is dead but still has some features of being alive so in essence they are not “totally dead.” It sounds creepy, and it is creepy, but in almost every community association in these United States there lurks “Zombie Debt.” Zombie Debt is best described as money an association has written off because a bank has foreclosed and there were dues owing that the association never received. The mistake is that this debt is not dead and much like a Zombie it still lives and can be collected. So why have not boards of directors and management companies not attempted to collect this Zombie Debt?
When your Condo & HOA collections fall short, and you can’t cover all your bills it can be a big problem. Vendors will start to charge late fees and if your association is a late payer they won’t deliver the good service that you have come to expect. Late Payers get poor service. HOA & Condo Delinquencies come at a price and the good paying owners pay the costs. There is not only a cost to pay due to vendor discontent, but the fees required to collect these assessments are expensive as well.
With the economic recovery it would seem that community associations are out of the woods and happy days are here again. Sorry, but no. According to the Community Association Institute (CAI) the average delinquencies nationwide is north of 5% and that is still not acceptable.