If you are one of the many people who have taken the responsibility of being on the board of directors for your neighborhood homeowners’ association, you likely feel a great sense of pride in where you live. Your willingness to step in and contribute to your neighborhood is respectable. Unfortunately, you will soon learn that not all of your neighbors may not always act with the same level of respect.
At some point during your tenure on the HOA board, you and your colleagues may be faced with the need to collect on member dues from a homeowner who has become delinquent. This can be tricky, especially as you may well know the homeowner personally, but it is a job that needs to be done. Homeowners’ associations have multiple options for collecting past due accounts.
As explained by SF Gate, you may need to pass efforts to a collection agency at some point. In addition to seeking repayment, many collection agencies report delinquencies to credit bureaus which may add to the pressure to encourage repayment from the homeowner. HOAs may also place liens on properties when dues are not paid. The lien may prevent the sale of the property until past dues are fully repaid. Depending on state laws, an HOA may also be able to foreclose on a homeowner for serious delinquencies.
This information is not intended to provide legal advice but is instead meant to offer useful information and guidance to homeowners’ association board members as they approach the challenging situation of finding ways to collect on unpaid member dues.