By Mitch Drimmer, VP Association Financial Services

Community associations are faced with having to deal with collecting delinquent assessments in good times and bad. If a community association were to advertise for a collections company this is how it may appear.

HELP WANTED FOR COLLECTIONS

The board of directors of our community association is looking for a collections solution that will not only help us recover our delinquent assessments, but will not cost us five dollars to collect one dollar. We have been working with our community association attorneys, and although they know the community association business well, they are not effective with their collections efforts. We need more than an attorney placing a lien and then maybe foreclosing on said lien. We need action and we need it now because our collections are costing us an arm and a leg, and we are not seeing any return on our investment with our current solution.

If you have purchased a condominium or property in an HOA, one of the documents you may be required to sign in connection with your loan is a “Condominium Rider or a Planned Unit Development (PUD) Rider.” This rider is an attachment to the document recorded in the land records to secure the note given by the lender for your purchase.  In most states including Florida, it’s called the Mortgage.

One of the most important items contained in the Condominium Rider/PUD Rider is the information regarding the maintenance fees for that particular community association. It is very important to the lenders that these fees are paid because they have an interest in the condominium unit or HOA property.  It is especially important to them if the unit has equity, because the community association has the right to foreclose on the title for non-payment of maintenance fees.

One of the courses of action a community association can take to resolve the issue  of delinquent assessments is an outbound call.  Outbound calls have proven to be a very effective method to get people engaged, informed & paying.  Now, this is not to say that your manager or any member of the board of directors should pick up the phone and start calling, because outbound calls are more then what you may think they are.  Reaching out to delinquent unit owners is a task that requires skill, training, compassion, and in some cases a very thick skin.  The call should be more of a consultation and never a confrontation.  This is why specialists should be engaged for this job.  It should also be noted that outbound collection calls are seldom if ever done by community association attorneys.

Learn from SNAP Collections how your community association can engage the Latest, Newest, and most innovative collection program.

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