Condo Association Management Blog

Simply use common sense.

What state are you from?, what do your by-laws say about late fees and delinquent owners, does your state have HOA laws? 
 
Our HOA is in Ohio and we have been successful working with owners who become delinquent but you have to be fair to the other owners and protect your interest by following your by-laws and by making sure a lien is in place, we file after 30 days. You can't require them to release financial information to you. I strongly suggest if you choose to do a repayment plan, get your HOA's attorney involved so it has more teeth than just the Board trying to help an owner out because they may take advantage of the situation.

WOW! Based on the way you worded your statement, I am assuming the homeowner is a willing participant in this repayment issue. Give the homeowner credit for wanting to make things right. I think you are on the right track when you state that there are a variety of reasons a homeowner can get behind. Obviously, some are more valid than others. I am all for saving attorney fees when possible. Liens should certainly be used in many cases, but if a homeowner is trying to work out a payment plan, the board should meet with them (alone), hear their case, then deliberate and (hopefully) develop a payment plan that is acceptable to both sides. It may take longer to collect all the overdue funds, but less expensive than attorney fees - and the possibility that a repayment plan from the attorney is not feasible for the homeowner, in which case, it's a lose-lose situation until the unit is sold and lien is collected on. 
 
You can have a lien in place (depending on how far behind the homeowner is), set-up a repayment plan with the homeowner, and remove the lien when overdue amount is resolved.

When we first started making the pay arrangements with delinquent owners, we met with them privately and wrote up a formal arrangement. Most, I'm happy to say kept the arrangement and were just happy to know we were willing to work with them. Some stopped paying and did not do anything until the attorney got involved (reminder letter that they needed to keep the arrangement they made). Our attorney makes no arrangements without Board approval so we are all on the same page. We have found we are most successful with the owner who has the willingness but most importantly the financial ability to pay.

I went through a similar situation years ago. We just worked it out and as long as I was making the payments, they were satisfied.

I always recommend to my boards that the payment plan come from the person who is requesting a plan. I tell the delinquent owner that we do not know their finances and what they can realistically pay. 
 
Much of it depends on the arrearage. There are also opinions on what a reasonable amount of time is. 
 
If they are willing to make a plan and stick to it, then I see no reason a board has to bear the expense and burden the owner with more legal cost of filing a lien. However, the association should be clear on what the penalties for a missed payment are. Filing a lien after a missed payment is often the incentive needed to prevent missed payments. 
 
There is no reason that the board/association cannot counterpropose. For example, if they propose an additional $25 a month, it may take a long, long time to get current. Anything more than a year, I would urge the involvement of legal counsel and the consideration of filing a lien.

Thanks for the replies. Our condo is in Illinois. We do have a procedure for setting up liens.  
 
The board has set up a procedure for repayment plans. The plan comes from the person who is behind in payments.  
 
But the procedure says that the back assessments should be repaid within 3 months. I think that is too little. What do the rest of you think is an acceptable time period?

Three months is very little time for most people. Again, it will depend on how much is owed and what their financial situation is. I still say Work With The Homeowner as an individual!...Something you can all live with.

My condo was sited for several building violation. It's only 6 units and we were assessed $30,000 per unit. The time limited nor the amount requested was not within my abilitiy to pay. I wasn't invited to any meetings or giving any information as it related to these astronomical. Now I have received a notice and demand for possesson. What is your advice?