What To Do If Members Fail To Pay Their HOA Dues
For a homeowner’s association (HOA) to run effectively, dues from community members play a significant role. Expectations for HOA dues are typically outlined when new homeowners join the community. Occasionally, the association may have difficulty collecting these payments from a member. As it is the board of directors’ fiduciary responsibility to make sure all members pay their HOA dues, we’ve curated some helpful tips to help navigate the next steps.
Don’t Ignore Late HOA Dues Payments
Ignoring late payments gives the impression that it is okay to not make the payment on time, so board members must act promptly. Nonpayment of HOA dues can be a disservice to all community members. First, it deprives the association of needed funds for essential maintenance and community projects. It also puts others at risk of having to pay more in future payments or special assessments. One possible practice to address this situation is to provide a statement to delinquent owners to encourage payment and remind owners of their obligation.
Offer Payment Plans
Payment plans are an acceptable solution that sets expectations for payment while giving the member the relief of not having to pay a large sum at once. Payment plans should define a reasonable amount of time for the member to pay HOA dues in full, protect the association from expensive legal counsel, and outline the next steps if the member fails to meet the contractual obligations.
Consult with an Attorney
If reminders and payment plans are not triumphant, the board could consult with their attorney or property management company, like AR Management, on what steps to take next. They can guide the association board on state laws for proper notice to the member and how to pursue a lawsuit if necessary.
Review Governing Documents
The HOA governing documents should be reviewed at this time as well to determine if there are any set guidelines the board must follow in dues retrieval. It is common for the by-laws to require registered letters to be sent when notifying the member of their failure to pay and potential legal action.
File a Lien
Filing a lawsuit is an expensive process that usually results in the association collecting just enough to pay their legal fees. A less expensive option is filing a lien against the homeowner and assures the association will receive payment of the outstanding debt when the property is sold.
Another method the board can use to show they are serious in collecting the HOA dues is to limit the member’s access to common areas until payment is made.
Before the HOA board makes any decisions, it is recommended that they know and understand their by-laws and local laws. Failing to follow either of these can result in a lawsuit, ending in the member’s favor.
If your HOA would like assistance or advice in collecting unpaid HOA dues, contact AR Management Company today!