RISE’s Proven Delinquency Management System Delivers 98% of Assessments within 90 Days

Actively collecting on delinquent assessment accounts in your HOA is among the most effective ways management can help keep association assessments from needlessly increasing. It is estimated that for every $100 in assessments not collected within the first 90 days from its due date, the association faces an additional burden of $64 in combined unrecovered costs, bad debt, and lost interest.

The adage “an ounce of prevention is worth a pound of cure” holds quite true here, except that a delinquency prevented is worth 1.64 times its face value. That’s because the older a debt becomes, the more costs the association incurs in attempting to recover those funds. These costs often take the form of hard costs such as attorney’s fees, court and filing fees, postage and mailing, and other administrative costs of collection, as well as soft costs such as uncollected interest on delinquent balances, foregone interest that could have been earned on funds had they been collected, and the cost of time your board and management invest in attempting to recover the delinquent assessments.

The result is often that these sunk costs are passed on to the members who diligently pay on time.

How RISE Collects on 98% of Assessment Accounts before Initiating Attorney Action

1. Clear and established collection policy with:
   • Set due dates and late dates
   • Delinquent interest and collection cost penalties that accrue at regular intervals
   • Non-monetary penalties for nonpayment, such as amenity access revocation
   • An association-adopted late fee in addition to its delinquent interest (if permissible by its governing documents or law)
2. Clear and established payment plan policies that owners are routinely educated on before delinquencies occur.
   • Often, once a delinquency exists, it may be too late to educate.
3. Setting the penalty for late payment to a level that is an effective deterrent to delinquency and communicating this to owners regularly.
   • This promotes the prevention of delinquency.
4. A no-questions-asked, one-time courtesy late penalty waiver with a payment in full of the principal balance and automatic payments set up.
5. A practice of taking every owner contact as an opportunity to:
   • Update contact information
   • Offer automatic recurring payments
   • Advise owners about delinquent balances (if any)
   • Track forwarding addresses and research returned mail
6. Using all practical and available methods of communication, such as:
   • Email statements
   • App notifications
   • Text notifications
   • Mail and certified mail notices
   • Phone calls
7. Consistency is key: clear and routine communications.
   • Follow a set collection process that has clear escalation from step to step
   • Communicate effectively and early the consequences of nonpayment
8. Don’t accept partial payments once a balance has reached the escalation stage.
   • This preserves your lien rights and forces the owner to enter a payment agreement to avoid your exercising of those lien rights.
9. If these practices do not result in payment then escalate to your association’s attorney. Early action by your Attorney can help ensure payment of your association’s assessments are prioritized above other debts.

As is often the case, the “secret” sauce to what sets apart the highest performers often comes down to consistent execution of not-so-secret best practices. At RISE, we are committed to consistent execution to help our communities thrive!