What are the Consequences if a Homeowner Doesn’t Pay Their HOA Dues?

Many homeowners have an HOA fee that they are responsible to pay for in order to live in the community they purchased their home in, whether it be a townhouse, condo or house. This maintenance fee covers many amenities and services required to keep the community in good shape and protect the community in times of crisis (insurance). Homeowners must adhere to these fees and pay them on time, or there may be serious consequences involved.

One concern many homeowners have is whether they will be affected if other homeowners don’t pay their HOA dues. At SnapCollections, we understand your concern as a responsible homeowner. As a collections agency in Florida serving the entire United States, we have emphasized the importance of HOA dues and how it affects community life.

Why Must HOA Dues be Collected?

A homeowner association must collect dues from each resident living in the community. These fees serve a purpose of maintaining, repairing and replacing anything that needs to be improved in the common areas. In other words, these fees keep the image and function of the community at its best.  Its not just about “curb appeal” but also is an important factor to safety and security.

Why HOA Dues can be Considerably High?

Depending on the community where you reside, HOA dues may vary. This is actually a typical reason why many homeowners don’t pay their dues; they feel as though they’re excessive or perhaps they simply can’t afford them.

After ongoing operation and maintenance expenses for common areas have been estimated, HOA dues are then calculated based on the community’s annual budget. These dues are divided among the homeowners as per the governing documents.  Some units may pay more than others depending on how the developer decided to have the maintenance fees divided among the properties when they first established the condo or community.

What Happens if Not Enough Dues are Collected?

There is the possibility that the homeowner association may not be able to collect all the HOA fees needed to meet the budget.  This can be due to just one late-paying or nonpaying homeowner. In this event, the community could begin to suffer. For instance, in the face of a monetary short fall pool services may be reduced and the pool may become too dirty to swim in, the fitness equipment might break down and the lights could get turned off in the clubhouse. Not only will the common areas be affected, but all the homeowners will see a deterioration in their services which will lower their property values and reduce the level of satisfaction in the community they choose to invest and live in. Most often good paying owners are hit with higher fees which not only put a burden on them but have the ultimate effect of lowering the value of their property.  Not only that, but reserves will not get funded and sometimes even raided to cover shortfalls making the association even less desirable to potential purchasers sending your property values even lower.  Would you buy into an association that had paltry reserves and was prime for special assessments?

What can Your Homeowner Association do About Failure to Pay Past Dues?

As a responsible homeowner, the better option to consider is to pressure your homeowner association to take action. Attend your next board of director’s meeting and voice your concerns about the delinquent homeowners and increased HOA dues or special assessments. Inquire if the board has a uniform collections policy in place and if they are sticking to the policy.

A homeowner association may be able to get the delinquent homeowners to pay, and there are many actions that can be taken.  Start with sending courtesy letters, then if the state statutes and governing documents allow restrict the delinquent owners from using the amenities and suspend their voting rights, when the time come have a lien placed on the delinquent owner’s property, send the delinquent owner to a collection agency to have outbound calls made and get them reported to credit bureaus. In a worse case scenario foreclose on the lien if the conditions are favorable to be to rent the property  in order to recover the money that is delinquent.

What if Your Homeowner Association Does not Pursue Delinquent Homeowners?

All homeowner associations have the right to take action against delinquent homeowners; however, what if they decide to do nothing? As a paying homeowner, you have the ability to change this: Replace one of the board members who isn’t doing his or her job.  A community association is a democracy and you can vote the board member out and vote in one who will take their fiduciary responsibility to collect maintenance fees responsibility.

In some cases, governing documents may not give the homeowner association the ability to act against the delinquent homeowner. The best that one can do in this situation is to amend the documents to grant the association more power.

Involve Yourself with the Operation of Your Community by Becoming a Board Member

An effective way to combat delinquent homeowners is to join your homeowner association board of directions and work to be sure action is taken.

SNAP Collections is an easy, efficient and cost-effective HOA collections platform for homeowner associations. We have been successfully collecting past due assessments since 2006. Our experience and success speaks for itself, as we are now a national company serving condos and HOAs from the East Coast to Colorado. Contact us today for more information.