Collections for condos and HOAs require you to consider this, The Fair Debt Collection industry has established an objective test based on “the least sophisticated consumer”. The purpose of this is to protect consumers. Some are Harvard Graduates and others are less educated and there are always the very clever.
Yes, times have changed and people are no longer walking away from their houses and condos because they are underwater but some things stay the same. Is your condominium or HOA still using coupon books to direct owners to pay? Does your management company have a dedicated call center to discuss payment matters with owners? Are people still paying your condo or HOA late every month. Most important, is your management company prepared to handle collections legally, properly and at no cost and no risk? Is your association handling it’s Accounts Receivable correctly?
A condo that will remain anonymous has a unique problem that may not at first glance seem like a dilemma but let me assure it is. They have over three hundred and fifty thousand dollars in the bank. The bad news is that money is in an escrow account from renters in case their tenancy results in damages or fines. That’s a one thousand dollar deposit for each and every renter. It is interesting to note that the building only has three hundred units and let’s say it has 70% renters (210 apartments) as occupants. That means there is at least one hundred and forty thousand dollars that should have been refunded to the renters (minus damages) but never were, and are sitting in the association’s bank account.
Community association Collections or for that matter any debt that is delinquent often deteriorates into a bitter cycle of pain. The property owner may fall into hard times and cannot afford their payments due to unforeseen consequences and an unfortunate process begins. First, there is the courtesy notes from the association and then when that fails to result into a payment the matter is sent to either an attorney or debt collector for action.