Condo Association Management Blog

You are probably bound by your Declarations and By-Laws to file a lien. You must do that just in case she files for bankruptcy so that you are in line as a creditor. You can file suit; however, if she doesn't have any money, that won't do anything except give an attorney the money. If there are services that the condo association provides, then you can take those away (for example if you provide cable service, you can turn that off). Other than that, not much you can do. This might be a good time to think about having a 'delinquent owner' account with funds from the Association fees that at least can be drawn to cover expenses if needed.

As Linda said, you are bound to do what it takes to recover the assessments, it is your duty and responsibility to your other homeowners who pay on time. If you delay then your board could be legally in trouble, depending on your state laws. A lien does not force bankruptcy, the owner will not be forced out because of it. You should at least have your counsel write a letter if you don't have a late policy that makes that routine. Small claims court allows for attachment of bank accounts for restitution. You've been reasonable on your side, but your HOA is a business, you must run it like one, hard as that may be at times.

Perhaps there is something the delinquent owner could do (yard work, etc.) to help pay her dues while she is having financial austerity?

You can ask her to agree to a payment plan and the BOD can waive the late fees and interest charges, but the assessments cannot be waived. Filing a lien should be done immediately as this is for the protection of the assn in case she files for backruptcy, her mortgage is foreclosed or she sells the property. The board needs to meet with this member immediately! 
Many assns are now budgeting for bad debts but assessments are only written off as bad debts when the member no longer owns the property. You cannot write off delinquent assessments as bad debts if the member still owns the property, as that would be akin to waiving the assessments.

Our association (inWashington state) has recently engaged a collection agency specializing in homeowner dues collection. They write the letters, make the calls, file the lien, and report to the credit bureaus. And there is little or no fee if they don't collect (not like a lawyer who gets paid whether he collects or not). Mail me is you want the names of ones we have researched and ultimately hired.

We would have the lawyer file the lien, then after the required period of time, we would instruct the lawyer to initiate foreclosure proceedings. When the unit sold, the corporation would be reimbursed for outstanding dues and all legal fees from the proceeds of the sale. There shouldn't ever be a reason to write off bad debt- it can be recovered, but it is a drastic measure. 
 

Former Manager, 
 
As a former manager you should know that the assn is NOT always able to get the delinquency after a foreclosure. In many instances there is no money left over. Also, if the owner files bankruptcy, not all, and oftentimes none, of the delinquent monies may be included in the bankruptcy. Garnishment of wages is not always an option. Sometimes what it costs to go after the money exceeds the amount of the delinquency. I could go on, but I hope you get the picture. Budgeting for bad debts is a very saavy thing to do especially at this point in time.

Mary and Former Manager, 
 
I agree with Mary that sometimes the cure is worse than the affliction, it does not make sense to spend more funds than you recover. Do that budgeting for bad debts every year, make sure your accountant amortizes it correctly on the balance sheet so that if any bad debt is ever recovered it can be recorded correctly when you receive the cash (we are having problems with this ourselves in our association, that is, tracing recovered assessments correctly). And, continue to spend what is prudent and legal in your state to get the owner to pay their share - you must go on record as at least trying, otherwise, you are delinquent in your own stewardship

Home Owners Association Management provides people with shared neighborhood values, an opportunity to enforce regulations, consistent with overarching statutory constraints, to achieve a community representative of such values. 
 
HOA stands for home owners association. Most neighborhoods and townhouse complexes have an HOA that takes care of all the neighborhood tasks anywhere from association fees, pool maintenance, lawn maintenance, and more.

Jared, 
 
 
 
You make it sound so easy; hire a property mgmt co and your problems are over. Well, I know you're just trying to get clients -- which, incidentally is NOT what this forum is for. But even assn's that have prop. mgrs still have members who don't want to pay. The manager can only do what the BOD instructs him/her to do. Assn's must be proactive but in the end, you can't squeeze blood from a turnip. If the h/o is upside-down on their mortgage, out of work, perhaps filing for bankruptcy and the mort. co. getting ready to foreclose, there just may NOT be any money for the assn. A prudent BOD will budget for bad debts. Maybe 5+ years ago that was unheard of, but it's becoming the norm at this point in time.

I am on the BOD of a 104 unit condo in MD. We have done all this. We have a 50% delinquency. That's right, HALF are not paying. We are in the final stages of implementing a parking policy - our Bylaws give the Board authority to regulate the use of the common areas, our atty gives us the green light. In short, pay what you owe or we will tow. We have one co-owner who owes $10,000. Why would anyone think yet another attorney collection letter to this person would matter? We are also using a collection service, and we now have BENCH WARRANTS on some of these delinquents. Big deal.

I am a homeowner in a condo complex in Charlotte, NC. I have been having problems with board members who use HOA monies to fix their units. My building is sided and the flashing has fallen and when it rains, it comes into my unit. I have called & e-mailed the mgmt co at least 4 times and all I get is lip service. I own the inside of the unit NOT the outside. What can I do? I live on social security and cannot afford to keep fixing things that are structural. I owe 2 months on my dues and told them that I will be using the money to fix my ceiling, as I am now broke fixing things they should be fixing. Anyone have any suggestions?

Mary Rose, 
 
 
 
My suggestion is that you immediately pay your delinquent assessments or you may find be faced with more serious problems than your unit not being maintained. The board most likely has the authority to foreclose for delinquent assessments. Withholding payment is not the way to get the board to listen to you. Continue to send them letters about the maint that needs to be performed on your unit.  
 
What evidence do you have that they are using HOA funds to "fix" their own units?

Is there any such thing as an "Exective Board Meeting" where no owners are allowed? Unless it is a legal matter I belive all meeting of the Board are open to the unit owners. Also what are you thoughts on e-mail meetings to conduct board business? If the conduct meetings or seek each Board member approval on expenditures, then those e-mails shoul be available to all unit owners. Please comment.

Alan, 
 
 
 
Yes,there is such a thing as an Executive Board meeting, or sometimes called a "closed meeting". In states where there is an open meeting law for HOAs, such as AZ where I live, members must be noticed for all meetings of the assn, including an executive board meeting where members are not permitted to attend. Usually there are only certain issues which can be discussed in a closed session. In AZ there are 5: legal advice from an attoprney; pending or contemplated litigation; personal, health or financial info about an individual member, individual employee or individual employee of a contractor; matters related to job performance of an employee; and discussion of a member's appeal of a violation cited or penalty imposed unless the member requests the meeting be held in an open session. But, if there is no open meeting law in your state then the board may conduct an executive meeting, not inform the members and speak about whatever they wish. 
 
As for email communications in which board members either discuss or vote on matters, in AZ that would be a violation of the open meeting law.  
 
Check your state laws to see if there is an open meeting law for HOAs.

Alan, 
 
North Carolina's open meeting law is only relevant for HOAs that receive Federal or State funding. 
 
As President of my Board, I encourage all meetings to be open, assigning numbers for any discussions regarding owners that only the Board knows who they represent. This protects the owner's right to privacy.

Ron, 
 
 
 
Can you post a link to the NC open meeting law? I can't believe it only applies to HOAs that receive st or fed funding. What would that have to do with open meetings and why would they even receive st or fed funding? Makes no sense at all to me!

Let me restate - The federal government Open Meetings legislation is for federal government bodies only. 
 
HOAs do not fall directly under any federal control unless they receive federal funds for public use. 
 
All HOAs within North Carolina should be nonprofit. North Carolina law for nonprofit corporations (55A-3-07): 
 
Chapter 55A 
North Carolina Nonprofit Corporation Act. 
 
Article 3. 
Purposes and Powers. 
 
§ 55A‑3‑07. Certain corporations subject to Public Records Act and Open Meetings Law. 
 
Any of the following corporations organized under this Chapter is subject to the Public Records Act (Chapter 132 of the General Statutes) and the Open Meetings Law (Article 33C of Chapter 143 of the General Statutes): 
 
(1) A corporation organized under the terms of any consent decree and final judgment in any civil action calling on a state officer to create the corporation, for the purposes of receipt and distribution of funds allocated to the State of North Carolina to provide economic impact assistance on account of one industry. 
 
(2) A corporation organized upon the request of the State for the sole purpose of financing projects for public use. (1999‑2, s. 7; 2001‑84, s. 4.) 
 
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Within North Carolina, HOAs are currently under a microscope by state legislature who may, as a result of public hearings, change the state's laws regarding HOAs. One recurring theme is "secretive meetings." So why not open the meetings up to all members as long as any discussion regarding any owner or property remains private.