An amazing story hit the airwaves today. It’s about an HOA board so frustrated with non-paying members of their association, that they had parking boots put on the cars of residents they thought had delinquent dues. Even renters within the association were ‘booted’, though they have no responsibility to pay assessments. I can hear it now, “No really boss – I can’t come to work today because my landlord didn’t pay their HOA dues!!” Imagine how amusing your boss might find that one.
This story merely exemplifies just how frustrated board members have become with delinquent association dues, and the ends to which they’ll go simply to try and recover this lost revenue. Residents were purportedly notified, but alas, it appears those written notifications may have gone ignored, as they often do.
Two Steps to Get HOA Dues
There are two simple steps which can prevent this kind of calamity from ruining what would otherwise be a mundane morning’s trek to work. First, using skip tracing helps assure you have the proper person, in the case of rental property, when trying to collect HOA dues. Skip tracing assures you have the property owner’s most accurate contact information – both their address and phone number (more on the importance of this later). This simple step is beyond crucial when you consider the likelihood of renters taking responsibility to relay mail directed to their landlord. In fairness, people’s lives tend to be filled with too many of their own details to spend time connecting the ‘communication dots’ for someone else.
Skip tracing is inexpensive and is successful a very high percentage of the time – even when the property owner is out of state. Which removes a very irritating problem for board members: that being, if you can’t communicate with the right person, you’ll rarely if ever get a peaceable resolution to delinquent dues.
Step two is to have a realistic, intermediate consequence that gets the attention of the party who’s responsible for paying the dues. One that affects the responsible individual, and no one else. I say ‘no one else’ because I’ve read more than a few comments posted on articles where supposed board members seemed to be exploring the possibility of embarrassing owners into paying late dues. While such comments may only infer such intent, it’s not beyond the pale to imagine frustrated board members thinking perhaps bringing problems to the attention of renters might influence their landlord’s behavior. Any such tack to collect HOA dues should be vehemently avoided, as it could be a violation of debt collection laws.
Common Solutions Recover Association Dues
There are, however, various options available which effectively motivate homeowners and landlords. For example, Small Claims Court, or credit reporting dues as a collection account. Both avenues are being used very successfully by associations and management firms throughout the country.
Of course this brings us back to our initial point, which is that you must assure you’re communicating any potential consequences early and often to the actual property owner. The irony being, that this course of action often avoids your ever having to actually invoke the consequence. And here’s a helpful hint: phone calls are three times more effective than letters when trying to collect a debt. Extending this reasoning out, you’ll find actually calling and leaving a message about an impending consequence is far more valuable than just sending letters. See how important skip tracing phone numbers and addresses is?
Homeowners get back on track about half the time when phone calls are coupled with a reasonable number of letters, informing them credit reporting or similar action will be taken. Neighbors will modify their behavior given real notice, and adequate motivation.
A Very High Success Rate
In fact, there’s one North Carolina HOA collecting 85.2% of their outstanding assessments with simple credit reporting. As soon as they started using it, it quickly became apparent their board could give all other methods to collect HOA dues the ‘boot’ (pun intended). And they’ve never looked back.
It’s understandable why associations are so concerned about their community’s reserves and collection of dues. Without these assessments communities suffer; from unperformed maintenance, to not keeping common areas safe and well lit, to the decline of property values themselves. A lot hinges on HOA dues. But abruptly-taken drastic steps, without allowing for a milder interim approach, is not sound strategy.
There’s a wisdom in not jumping to harsh tactics simply because a few well-written letters failed. By using gradient steps to recover HOA dues, you’re allowing the fabric of your community to remain the neighborly quilt of relationships it should be.