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How To Deal With Late Homeowners Association Fees

Posted by IKO Community Management on October 27, 2016 at 9:00 AM

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When you are in your community’s homeowners association, it is typical to feel caught between two worlds with a commitment as a regular neighbor and an elected duty to the community as a whole. This can become especially complicated when it comes to dealing with monthly dues, specifically if they are late. You want to keep your friendship, but you need to collect fees from the homeowner who held BINGO night last week, so what do you do?

With the help of American Express and REALTORS®, IKO Community Management explains how to handle late dues, even if it is from your friendly next-door neighbor:

  1. Follow up. Whether it is an email reminder, a personal phone call, or a mailed letter, you should follow up with the homeowner. A lot of homeowners associations let their neighbors slide with a monthly payment or two due to the fear of ruffling feathers. Unfortunately, without the help of each individual, the community suffers as a whole. Dues help pay for services like trash removal, recycling, towing, snow removal, and more. It also helps keep common areas clean and up-and-running.

  2. Stick to a reminder schedule. HOAs are typically very busy, so offer an online dues payment service like IKO Community Management’s. You can even set up automated reminder emails to send to homeowners in advance. Start with 45 days, then move to 30 days, 2 weeks, 1 week, and the day of payment.

  3. Be prepared to be stern. As a member of the homeowners association, you may have to request payment on multiple occasions. This can also be frustrating for homeowners, who probably have a handful of excuses for being late. It is essential to remember to be stern, professional, and respectful when inquiring about delayed association dues. However...

  4. Provide waivers fairly. "It is important for associations to be very consistent," says Debra A. Warren of Associa, a community management company in Dallas, Texas, to HOAleader.com.

    "If they want to modify their application of the late fee in any way, they need to make sure they're doing it in the same way for everybody. Just be consistent."

    Warren also suggests being fair to responsible homeowners who miss one month for whatever reason, especially if he or she asks for a waiver: "If somebody has been consistent and misses a month, and then they ask you to waive that month's late fee, I would encourage most associations to do that because once you do, they are back on track," advises Frankel.

  5. Consider a course of action. While taking away the title on someone’s home or condominium is considered an extreme consequence, most HOAs handle delinquent fees by taking away privileges to community amenities, such as access to the pool, fitness center, and other common areas. This restriction will abide by your community’s covenants, conditions, and restrictions (CC&Rs) while sending a subtle message to the homeowner about the seriousness of their late payment: No fee, no amenities.

In short, it is important to keep an open line of communication between the homeowners association and the homeowners, especially when it comes to paying HOA fees. There is no need to worry about blurring the lines between friends and HOA member if you remember to be polite, understanding, and respectful of others. It pays to be nice.

For more information about HOA finances, check out our other popular posts, What Is Capital Planning, And Why Should You Care? and The Basics of Good HOA Accounting. You can also sign up for IKO’s weekly blog:

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Topics: HOA Board