Cracking Down on Delinquent Assessments

Financial stability is essential for HOAs. You need to have enough funds to cover regular upkeep and maintenance, as well as unexpected repairs. Keeping a handle on budgets and effectively calculating dues can reduce the need to adjust fees as frequently. By implementing cost-saving initiatives and spending wisely, the HOA can keep dues more stable.

But there will inevitably be those who are late paying their dues. Some may pay immediately when they realize their error, but others linger. While this may not seem like a big concern initially, the longer it goes on, the more of an impact it has. Delinquent dues can reduce cash flow and the ability to stay on top of HOA expenses. Prolonging collection can also make the process more challenging.

While these can be difficult discussion to have, they are necessary, as enforcing collection is important to the continued operation of the HOA. Here are a few ways to deal with delinquent assessments:

  • Make sure that homeowners are educated about the process and when fees are due. This should be clearly explained in HOA documents and can be reiterated in periodic communications with homeowners. Also make sure that they understand the protocols for when payments are late.
  • Understand what is permitted according to the HOA CCRs, bylaws, and rules. There are many collection options available to deal with delinquent assessments, but they can only be applied if dictated by the governing documents. Such options include lien rights, personal liability, late fees, restriction of access to community amenities, and legal actions.
  • If the home has been foreclosed upon or the owner has declared bankruptcy, understand what this means in terms of your ability to collect upon late assessments. This may limit your options but does not necessarily mean you won’t get any return.
  • Stay up-to-date on record keeping. Know exactly how much each homeowner has paid, when, and if there is an overdue balance. Should issues arise, you want to have detailed records to refer back to. Ledgers should be periodically reviewed for accuracy, compliance, and completeness.

Should delinquent assessments become an issue, talk to your HOA attorney. They can guide you in the steps to take to collect on these dues. Ensure that they are well versed in HOA collections and have all of your governing documents so they know what actions can and cannot be taken. The attorney can also put liens in place to further enforce your efforts.

Don’t let delinquent assessments become a financial downfall for the HOA. Make sure that whoever is keeping the books is staying on top of accounts and knows which ones are past due. Consistently abiding by the procedures set forth in the HOA rules will reinforce to homeowners the importance of paying on time. Also be sure to educate them on why dues are necessary and the importance they hold. For more information or assistance, turn to Kuester Management Group to support your HOA operations.

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Bryan Kuester

Bryan Kuester

Bryan is the CEO of Kuester Management Group. He has over 15 years of managing community associations throughout North and South Carolina.

His specialties include Community Association Management - maintenance, budgeting for operational and reserve funding, long-range planning, covenant enforcement, amenity management, onsite management, large scale management.

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