“Hope is important because it can make the present moment less difficult to bear”. The problem with hope when talking condominiums and condo association fee collection is that we all really want to think the best of our neighbors; we have hope they are good and honest people. We want to believe that old Joe down the hall just let his condo association fees slip his mind and once he is reminded he’ll apologize and cut a check right there on the spot. But alas, hope can be fleeting or misplaced.
Condo association fees are the hope that feeds our present and future
Let’s face it, condominiums while our home are also a business. They must have money from condo association fees to provide for daily operating expense, common maintenance, reserve funding, capital funding and insurance. They probably even have some staff cost, a maintenance man or a management company. It all adds up and then it gets divided and passed on to you in the form of a monthly condo association fee. Then when something comes up unexpected there may be an additional association assessment that needs to be collected.
Most condo associations will admit they are a business and must be run like one, but they have trouble acting when a neighbor is involved. Let’s face it, this is Houston, Texas, people are friendly here and they don’t want to have to be the bad guy, they hope the person just forgot their condo association fees. Well, sad to say, hope is NOT a strategy for collection.
Looking for a strategy?
It may be time that your association board sat down and set up a list of targets for collection of condo association fees. The development path includes investigating how your governing rules state delinquent accounts will be handled. Finally, you have to agree to apply this list to every association assessment and every person equally.
From the list you should create an administrative resolution to set up the policy on collection of delinquent association assessments. Once this policy is enacted by the condo association it should be promulgated to all co-owners and if possible incorporated into the CRR’s. It should simply lay out the process for collection of condo association fees. Things it should include are:
- Date association assessments are due
- Grace period if applicable, late charges apply
- Intent to Lien notice over 30 days
- Lien recorded after 45 days
- Acceleration of assessments to end of fiscal year after 3 months
- Lien foreclosure after 4 months
- After lien foreclosure, all payment/settlements require board approval
Remember, the process for collection of association assessments has to be in writing and it has to be enforced equally to be effective and hold up in court.
Management companies for third party billing
Another consideration, have a management company do the billing and collections of association assessments. You will still need a written guideline for them to follow in the CRRs, but they provide a buffer that eliminates any bad feelings that may arise out of the collection process.
Contact your condo association today and find out what your policies are for collection of delinquent condo association fees. Find out if they are being followed in a consistent manner; if not, get with your board and suggest changes be made to insure a positive cash flow with all participating. For more information on this subject check here.
