Collecting HOA dues can be stressful and one of the hardest jobs for the association. It’s especially difficult when homeowners refuse to pay dues and have overdue balances, as a high delinquency rate can lead to deficits in the community budget. Before your HOA budget comes into jeopardy, there are steps HOAs can take to reduce delinquencies.
Follow the Collections Policy
The HOA governing documents should outline a collections policy and when a homeowner has become delinquent. Review the collections policy, and make homeowners aware of the consequences of not paying their dues.
Monitor and Discuss HOA Delinquencies
Pay special attention to the delinquency report and reach out to homeowners before their debt becomes hard to manage and catch up on. Some homeowners may not be aware that they are delinquent, so do your best to communicate with them. You can send a notice of delinquency that includes how much they owe and when they should settle the amount by. It should also include any late fees you intend to charge.
Enact a Late Fee
Homeowners are more likely to pay their dues on time when there’s a penalty. Confirm that a late fee follows your HOA’s governing documents and all local, state, and federal laws.
Suggest a Payment Plan
Review the HOA governing documents to see if a payment plan is permitted to help delinquent homeowners catch up on late dues payments.
Put Privileges and Amenities on Hold
If your HOA offers community amenities like a pool, gym, golf course, etc., you can take away access to these items as an incentive for delinquent homeowners to take care of their overdue accounts, as long as the governing documents permit.
These small steps HOAs can take to reduce delinquencies keeps them from taking more drastic measures, like hiring an HOA collections agency, going to small claims court, attaching a lien on the property, and initiating foreclosure proceedings. If you need more tips on how to manage your HOA, contact Prism Realty Management. Give us a call at 512-676-5842 — we’d be happy to talk to you about who we are, the services we offer, and our process.
