Homeowner associations (HOAs) help keep property values stable. They establish standards for local homes and limit the use of properties to prevent one neighbor from diminishing home values for everyone else who lives nearby. HOAs also offer amenities such as community-access swimming pools, gyms and local playgrounds.
They typically collect a monthly fee or membership dues from local homeowners to fund the maintenance of shared spaces and ensure the community has the resources to protect local homeowners. Sometimes, property owners fall behind on their HOA dues. The HOA then has to engage in collection activity.
What are some of the most effective options available for convincing homeowners to catch up on past-due HOA fees?
1. Letters and late payment penalties
The vast majority of payment disputes are easy to resolve. When homeowners understand that there are consequences, they may quickly take steps to come back into compliance.
Sending them written notice advising them of what they have failed to pay and informing them of the late fee associated with their unpaid account balance could inspire them to catch up on their payments if they have the resources available to do so.
2. Limiting amenity access
Another viable collection option involves cutting off access to shared community amenities after one or more missed payments. Being unable to use an entry code or key card to access a gym or swimming pool can become a source of embarrassment and inconvenience.
Property owners paying a premium to live in a community with special amenities may take action when they lose access to those amenities due to late payments.
3. Pursuing liens
The fees collected by HOAs are a legal obligation that comes with homeownership in an HOA-governed neighborhood. If property owners fail to pay what they should, the HOA usually has the authority to request a property lien.
Particularly when a homeowner is many months in arrears or has accrued additional costs due to late fees and other violations of community standards, the courts may agree that granting a lien against a residence is an appropriate form of recourse. A lien prevents the property owner from transferring the title to someone else or selling the home without first paying what they owe.
HOA board members frustrated by financial non-compliance may need help preparing for collection activity. Learning about state law and taking prompt action to enforce community standards is important for the protection of everyone who lives in the community.
