Condo Association Management Blog

HOA Collection firms - Worth the price?

  

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When condo associations / HOAs have difficulties with assessment collections, they have a few options:

* Continue their current collection efforts,

* Enhance their current collection efforts (e.g., friendly reminders, stronger collection letters),

* Ask their attorney to send letters (pre-drafted letters will save on fees), or

* Engage a collection firm

Are collections firms worth the price? When is it sensible to use an HOA collection firm and when should an HOA collection firm be avoided?

Typically, it makes sense to have the condo association / HOA handle the process internally or through their HOA management company up until a unt owner becomes seriously delinquent-- typically that is 60 or 90 days past due. Most HOA collection firms will take past due accounts on a contingency-- that is, their fee is based on the successful collection of past due HOA accounts. In other cases, HOA collection firms charge based on activity (sending letters, making phone calls, etc).

If you do decide to utilize an HOA collection firm, make certain that a) they follow consumer debt-collection laws, and b) they follow the condo association / HOA's bylaws.