A challenge that many HOA communities in Florida encounter is how to deal with delinquent HOA fees. Unfortunately, when homeowners don’t pay their fees, the rest of the neighbors suffer by paying higher fees, receiving special assessments, and less spending on community events. Even if HOA board members are dealing with just a few homeowners that are delinquent on fees, the association’s budget can take a significant hit.
If too many homeowners in the community stop paying their HOA fees (particularly in condominium associations), lenders may be unwilling to offer new mortgages or refinance existing loans for properties in the community. As you can imagine, this would have a negative impact on property values.
So what are the options for HOA board members when it comes to collecting unpaid HOA fees? There’s really only one answer: the HOA board must get tough.
The Value of Acting Quickly
The sooner you address delinquent HOA fees, the better off your community will be. Make homeowners aware of how soon the HOA will take action if fees are not collected to create a sense of urgency for submitting dues on time. For example, the board could communicate that the HOA will only wait 60 days for delinquent fees before placing a lien against the title of a property.
Additional Tips for Dealing with Overdue HOA Fees
HOA board members should implement the following policies for dealing with delinquent HOA fees:
- Consult an attorney.
As a best practice, your HOA should select an attorney to advise your community on how to legally deal with overdue HOA fees. If necessary, the attorney could prepare a letter to demand payment, but keep in mind that these documents can run between $200 and $500 per home. Suing a homeowner could cost upwards of $2,000. To keep costs under control, your attorney should also be able to recommend a collection agency that is experienced in assisting with HOA collections.
- Prohibit use of community amenities.
If a homeowner is delinquent on HOA dues, he or she should be restricted from using community amenities such as the pool and/or tennis courts until the fees are collected. Prohibiting use of community amenities is an effective motivator to get residents to pay dues.
- Ask renters to pay fees if property owner refuses.
As a best practice, have tenants sign a lease agreement that says they will pay HOA fees if the property owner doesn’t. Having this agreement in place will provide your HOA community with a backup source for payment.
- Offer a payment plan for property owners in financial distress.
If a property owner is cooperative in wanting to make good on delinquent debt, offer to break down the HOA fees over a 12 month period.
It’s in the community’s best interest for HOA board members to take prompt action when dealing with unpaid HOA fees. Use the tactics outlined above to collect overdue HOA fees and come to an agreement that will work well for the property owner and HOA community.
Collecting unpaid HOA fees is one of the biggest burdens that HOA board members face. Our team at Vesta Property Services can alleviate your board of this crucial responsibility. Contact us to learn how we have been adding value to HOA communities in Florida for more than 25 years.
