Association collection policies are set by the board members of individual associations and may be included, at least in part, within an HOA’s declaration and bylaws. A collection policy outlines the association’s internal protocol for determining how the unpaid assessments will be handled.

Individual HOAs can mostly adopt whatever policies are appropriate, as long as they comply with applicable state and federal laws. Typical collection policies include:

  • When assessments are due and when they are considered “delinquent;”

  • The collection fees and when they can be imposed by the HOA;

  • The steps the HOA takes to collect the delinquent fees, including any required written notices; and

  • The third-party vendors the HOA uses for collection—such as collections agencies and lawyers.

Therefore, depending on the association’s collection procedures, one association might refer an account to a collections agency as soon as it is 30 days past due, while another might not send accounts for collection at all.

Collection policies are required in a few states but usually left up to the board’s discretion. See, e.g., Colo. Rev. Stat. § 38-33.3-209.5 (requiring written policy); O.R.S. § 5312.06(d)(11) (permitting but not requiring formal collection policy). Consequently, not every HOA adopts an official, written collection policy.

It is essential that an HOA follow its internal policies and enforce homeowner obligations consistently. Homeowners can potentially assert unequal or selective enforcement action as a defense in a civil lawsuit.  See, White Egret Condo., Inc. v. Franklin, 379 So.2d 346 (Fla. 1979); Bloch v Frischholz, 587 F3d 771 (CA 7 2009).

Court Decisions

  • Park Place Estates Homeowners Assn. v. Naber, 29 Cal.App.4th 427, 35 Cal. Rptr. 2d 51 (Cal. Ct. App. 1994). The court recognized an association’s need to collect delinquent assessments because “homeowners associations would cease to exist without regular payment of assessment fees, the Legislature has created procedures for associations to quickly and efficiently seek relief against a nonpaying owner.”

  • Saunders v. Thorn Woode Partnership L.P., 265 Ga. 703, 462 S.E.2d 135 (Ga. 1995). An association’s enforcement activities must be “procedurally fair and reasonable,” and its decisions must be made in “good faith … reasonable and not arbitrary and capricious.”

Related Articles

Featured
Step-By-Step Guide To The HOA Assessment Collections Process

When you purchase a property in a community with a homeowners’ association, you’re also acquiring the obligation to pay regular assessments. Unfortunately, though, homeowners are sometimes financially unable to pay assessments. Homeowners faced with potential collections action must understand how the HOA collections process works and the legal rights and redress available for both homeowners and the association. This guide will help all community members, including the board, resolve conflict, and avoid escalation.

HOA Fees: What Happens When Members Fail to Pay?

HOA fees are the costs assessed to all property owners for items such as lawn care, snow removal, utilities, property maintenance, common area maintenance, security and similar items.  Some of the more expensive common area maintenance items can include swimming pools and equipment that is located in a community building.  The amount and type of items that are included in HOA fees will vary depending on the nature of the property, its location, and how extensive the services are that are provided within the context of the community. 

The Service Member’s Civil Relief Act (SCRA) Applies to Homeowners' Associations

Given the sacrifices of our men and women in uniform, it is only right that the Congress passed a law in 2003 to assist military members with collections and foreclosure issues. Under the Servicemembers Civil Relief Act (SCRA), all creditors have limitations on debt collections against active duty military members. These limitations include the temporary suspension of judicial and administrative proceedings and transactions that may affect the civil rights of military members during their service. This article will examine in detail the protections afforded by the law to military members who own properties within homeowners' associations.  

Important Facts About HOA Liens & Foreclosures You Should Know

The right to record liens, and to foreclose on unpaid liens, is perhaps the most powerful tool homeowners’ associations have to enforce assessment obligations.  State HOA laws are designed to allow associations to recover unpaid fees without undue effort and expense while protecting homeowners from overly aggressive associations by requiring strict compliance with statutory procedures and ample notice to homeowners. 

Understand The Law That Protects Owners From Abusive HOA Debt Collection Practices

In 1977, Congress passed the federal Fair Debt Collection Practices Act (the “FDCPA” or “Act”) to prevent abusive, deceptive, and unfair debt collection practices by debt collectors. The act prohibits debt collectors from harassing consumers or using deceptive conduct when attempting to collect a debt. Homeowners or condominium maintenance assessments are subject to the FDCPA, therefore, the association’s debt collectors must follow the law when attempting to collect past due fees from homeowners.