HOA Delinquent Collection Options.

HOA Delinquent Collection Options.
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There are several ways that a Board may try to retrieve delinquent payments from their fellow homeowners. This Blog will discuss a few of those different options you can use to retrieve delinquent payments in a HOA.

  1. Issue voting restrictions and amenity restrictions.                                                                                                                                                                                                                                                                                Many Governing Documents and State Statues allow the Board to restrict delinquent homeowners use of the common amenities, also from voting or running for the board. These restrictions are a great first option due to the fact that they cost nothing to the association.
  2. Contact the bank of the Homeowner who is not paying assessments.

    In most cases not paying assessments can put the homeowner in breach of their mortgage contract. Which in some cases the bank will have to pay.

  3. Use an Association Collections agency to collect the delinquent assessments.

    A merit-based collections agency is incentivized by acquiring your associations delinquent assessments. Which allows the board to not use other good-paying homeowners’ money to pay for an attorney, instead the delinquent homeowner carries the burden of paying their own debts. The board give a negotiated percentage of the delinquent assessments back to the collection’s agency.

  4. Acquire an Attorney to file a lien or foreclosure.                                                                                                                                                                                                                     The final option in the process of acquiring delinquent assessments is placing a lien or foreclosure on the property. Of course, then the association is stuck simply hoping that in the lien foreclosure sale, somebody buys your lien rights. If nobody picks up the property, you must acquire it and make it a rental property until the bank comes for their collateral (remember, foreclosing on a unit does not extinguish the bank’s priority lien). Finally, this process also leaves the good-paying homeowners paying thousands to an attorney.
  5.  Final thoughts.

    We at PMI Birmingham Region have made it a priority to make the process of handling delinquent assessments as smooth as possible for our homeowners. We also understand the struggle that some delinquent homeowners face. So, we at PMI believe that yesterday’s delinquent homeowner is tomorrows board member. We would love to have a conversation with your board of directors and change how assessments are handled in your Assocation.

    If you are looking for any Assocation needs in the Birmingham, AL area, please contact us

    (205)583-2500 or brady@pmibirminghamregion.com