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Monday, February 12, 2018

8 Homeowners Association Collection Laws

It's HOA collection season, so our HOA Ninjas want to remind you of the 8 laws of HOA collections to help your homeowners association help its members pay their assessments on time. 

Following these laws will collect more dues more quickly, and keep your HOA in compliance, so you'll have the best chance to win any potential court cases that may arise.

HOA Collection Laws

  1. Collect early and often
    • Don’t delay collections in your HOA. You don’t do the HOA or the homeowner any favors if their balance mushrooms to an amount they can’t pay all at once – then payment plan costs, interest, late fees and attorneys’ fees can start to stack up, and they all hurt your association’s cash flow.
  2. Follow your policies
    • Have a written collections policy and follow it with each and every homeowner. Not only does this allow your board members to avoid pleas from their neighbors to cut them a break, but it also insulates your HOA from accusations of discrimination, which can arise when everyone isn’t treated the same.
  3. Prioritize collections
    • Someone on your board needs to be responsible for making sure collections is a regular monthly habit, and they need to be honest and accountable to the board for the numbers at every meeting. If you don’t have such a person, get professional help.
  4. Make payment easy
    • Does your HOA accept credit cards, ACH payments, personal checks, even cash? Why not? The first rule of business is to make it easy for the customer to pay.
  5. Keep contact info current
    • If your homeowners association doesn’t have current email addresses and telephone numbers for its members when they are current with their dues, take our word, members probably aren’t going to share that information when you’re in “bill collector” mode. Have a system to update contact info based on checks, emails and phone calls your HOA receives.
  6. Stay alert to clues
    • The broken window theory suggests that failing to police small crimes sends a signal of decay and lawlessness which can lead to bigger problems. Keep an eye out for homes that suddenly seem to be less-well maintained or have an increase in violations. These could signal changes in the home that could impact your association economically.
  7. Show respect and expect respect
    • Every HOA member is a neighbor and deserves respect from the board, property managers and attorneys. Showing respect and understanding can be one of the best ways to get a sum collected and turn a potential adversary into an advocate – we’ve even gotten thank-you notes from homeowners we’ve collected on.
  8. Never give your opponent ammunition
    • Violating fair debt laws or failing to treat all homeowners equally can land your homeowners association in hot water that will cost you thousands in attorneys’ fees to escape. Always follow all laws and your covenants, bylaws and policies to a T – you’ll be glad you did in the off chance the case does wind up in court. Just remember everything you learned in kindergarten and you’ll stay clear of most regulatory violations.
Following the above laws won't guarantee collection, but they will make the process stronger, more accountable, and more successful. If you have any questions, give us a call at (704) 721-3500, or fill out the form on our website.