Board members often tell Mulcahy Law Firm, P.C. that collecting delinquent assessments is one of the most difficult duties they have to oversee.   This blog will provide a few quick tips to help boards more effectively collect delinquent assessments.

First, the board must take prompt action on delinquent accounts if the board wants to have a low delinquency rate.  If the Board doesn’t act promptly to collect the debt, the owners think it is okay  to pay late and those owners inclined to “juggle bills” will always “late pay”the assessments.  Boards should charge late fees when owners do not pay in  by timely manner.  Further, if an assessment is 60-90 days past due, the association should consider recording a notice of lien on the lot/unit. Experience has shown that the longer delinquent accounts are unpaid, and accruing additional charges, the harder it will be for the association to collect the delinquent balances.

Second, turning over delinquent accounts to the association’s attorney to collect on the debt before the debt becomes too high is also important.  Trust me, it is a lot easier for a lawyer to collect a $1-2,000 debt vs. a $10,000 debt from an owner.  The association should provide the attorney all pertinent information on file: owner’s name, address, breakdown of charges and all correspondence between the owner and the association. If pertinent information is not available, the attorney should have the resources necessary to find such information.  The association’s attorney should do a due diligence check when the attorney first gets the file to determine the best method and the strategy to collect on the debt.  The attorney should report the collection strategy back to the Board and get approval to move forward with the strategy.

Please feel free to contact me at any time to discuss collection of delinquent assessments for your association.

By:  Beth Mulcahy, Mulcahy Law Firm, P.C.