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CONSISTENT COLLECTIONS
April 1, 1999
At some point in time, every association will have a
problem with one or more owners who are past due with their
maintenance assessments. This problem may be caused due to
sickness, loss of income, or even death. But in most cases,
collections can be handled consistently and on a basis that
is fair to all concerned.
Maintenance assessments are required to operate and
maintain the association’s assets. The need for these
assessments is established every year in the association’s
budget. The assessments then fund the expense accounts
established in the budget. The failure to collect the
assessments to fund the budget can have a serious impact on
the operations of the association. The Board of Directors
needs to deal with the problem and collect these past due
funds as quickly as possible.
Prior to the association collecting owner’s assessments,
the Board of Directors needs to establish the rules
governing the payments of assessments and the procedures
for collecting same. In most cases, the association’s
bylaws will provide the Board of Directors with the
collection process procedure. It will spell out when the
assessments should be billed (monthly, quarterly or
annually), when the assessments are due and when the
assessments are late. In some instances, the documents will
even indicate when the owner should be sent to the attorney
for collections and when they should begin foreclosure
proceedings on the owner. If these procedures are not
spelled out in the association’s documents, then the Board
of Directors, through the unit owners should consider
amending the documents to reflect a reasonable collection
procedure.
If the association’s documents are silent on this and
amending the documents is out of the question, then the
Board of Directors can make reasonable rules regarding the
collection process for the association. This would be
spelled out in a Board Resolution adopted at a duly called
meeting of the Board of Directors. In either case before
anything is done, the Board of Directors should seek the
advice of the association’s attorney to help guide you in
this process.
If, you are fortunate to have these procedures spelled out,
then at every instance the owners should be told about
these procedures at the time of billing and also with
reminder notices and in newsletters. This is necessary due
to new owners coming into the association. Never assume
that everyone reads their documents or every piece of mail
that comes to their home!
Now the hard part. FOLLOW THROUGH ON THE PROCEDURES! Be
consistent. If late fees are to be assessed. Then do it. If
by a certain date delinquent owners are to sent to the
attorney for demand letters or liens, then do it too. But
always be consistent.
If your association is experiencing collection problems or
would like to avoid those potential problems before they
arise, then do the following:
Consult your documents and review the procedures. If they
seem reasonable, then make sure you begin following them.
If they seem inadequate or are out of date, consult with
your association attorney for further review.
Whatever the procedure is or if the Board has passed a
Resolution concerning collections, then supply the unit
owners with a copy of the procedure prior to
implementation.
Continue to let the owners know what the procedure is at
every instance.
Let your management company or attorney do their job, as
stated in the documents or in your Collection Resolution.
Copyright 2007© Associated Property Management of the Palm Beaches, Inc.
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