Why Your Community Needs a Written Delinquency Policy
A written delinquency policy is crucial to have in every community. Typically, this type of document consists of any information regarding delinquencies within the community, along with the consequences for continued non-payment of maintenance fees.
The Components of a Delinquency Policy
The delinquency policy should first state the section from the Declaration of Covenants or Articles of Incorporation where the board of directors are given the authority to evaluate it’s delinquency and to take action to collect these assessments. Simply, this prompts the homeowners that they did agree to this obligation and that the Board has the authority and fiduciary obligation to enforce the collection.
Lastly, the delinquency policy should organize the steps within a set time frame in order to arrange when notices and letter for collections will be sent. Each individual step should also state the action that will be taken for any penalties that will be evaluated.
The Advantages of a Delinquency Policy
A written delinquency policy does not just enforce action against those who are penalized, but also protects the entire community. Some of the policy’s advantages include:
- Communicating to the homeowners about how the delinquencies are going to be handled. This will encourage homeowners to pay their dues in a timely manner.
- Providing indiscriminate treatment for handling delinquencies. This reduces the chance of a lawsuit between a homeowner and the Board.
- Forming steps to ensure that the collection process offers homeowners a chance to pay their overdue assessments before drastic measures are taken.
- Establishing clear guidelines for late fees, late interest (as per your governing documents) and other consequences so there are no surprises for delinquent homeowners.
- The delinquency policy can be transferred between boards so that there is no confusion or contradictions within the policy itself and how delinquent homeowners are handled.
Eliminate risks associated with delinquent homeowners by crafting a written delinquency policy. This is the best front line defense against a delinquent homeowner who decides to claim discrimination. To receive the maximum effect of a written delinquency policy, publish or issue the document annually to all homeowners.
SNAP Collections has been successfully collecting delinquent maintenance fees for community associations 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. Our proprietary HOA collections platform is designed to be transparent so that boards of directors and management can keep track of the status of their collections files. Contact us today for more information.
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