Homeowner’s associations (HOA) and other community associations work to maintain common areas and enforce community standards. When functioning well, an association can stabilize property values and make the community a wonderful place for everyone to live.
However, to achieve these aims, the HOA must have proper funding. When too many homeowners are late with payments, the entire community suffers.
Collecting overdue assessments can be difficult, but there are proven strategies that can help. We discuss these strategies and more below.
Why Assessments May Be Late
Keep in mind that not every delinquent assessment results from intentional nonpayment by a homeowner. In fact, homeowners may fall behind on their assessments for several reasons. These include the following.
- Financial hardship: Sometimes a homeowner experiences unexpected life events, such as job loss, medical expenses, or other financial difficulties. These can make it hard for homeowners to keep up with their dues. While the HOA is still entitled to these funds, recognizing the homeowner’s financial hardship could help your Board find a reasonable solution with the homeowner, such as a structured payment plan.
- Missed deadlines or oversight: Sometimes homeowners forget about a payment or billing notice. Missed deadlines are especially common in communities where assessments are paid quarterly or annually. Sending reminders can help these people pay their bills asap.
- Confusion about assessment requirements: IF a homeowner is new to the community, they may not be aware of when assessments are due, how they should be paid, or what the fees cover. Communication is the key to solving this issue as well.
Strategies for Collecting Delinquent Assessments
No matter why a homeowner is late on their assessment payments, the association must eventually receive the dues. If your Board allows too many homeowners to go unpaid on their bills, there may not be enough money to maintain the community, causing everyone to suffer.
Here are strategies that work for collecting late payments.
1.) Create a clear collection policy.
Make sure your HOA has a written collection policy available to all homeowners. It should outline:
- Payment deadlines
- Late fees
- Interest charges
- Collection procedures
- Available payment options
The better this policy is communicated, the more likely your homeowners will pay their bills on time or immediately upon request.
2.) Communicate early and professionally.
Communication is the key when it comes to collections. You do not want to be threatening in your communication with residents. Instead, use professional language that reminds homeowners of their obligations and provides a timeline for repayment. Doing so will demonstrate that the association is proactive but not immediately litigious.
3.) Offer convenient payment options.
By making it easy for homeowners to pay assessments, your Board can reduce the time between missed payment and repayment. Many associations now offer the following for the convenience of their residents.
- Online payment portals
- Automatic ACH withdrawals
- Recurring payments
- Electronic invoices
4.) Partner with a professional community association management company.
Partnering with a professional management company, such as ACRI Community Realty, can reduce the time and stress delinquent payments put on the Board. Our team will help with all aspects of billing and collections to streamline your process and make things as convenient as possible for your homeowners.
Contact ACRI Community Realty today to support your community’s long-term financial health and foster positive relationships with homeowners.
