Delinquent debts can negatively affect a consumer’s credit report for up to seven years. Not all creditors—particularly small ones—report to the credit bureaus, so many HOA debts are never reported unless they result in judgments.

However, collections agencies sometimes do report delinquent debts, so there is no guaranty that an unpaid assessment debt owed to a small HOA will not end up on a credit report.

Consumers have a right to dispute invalid debts on their credit reports with the credit reporting agencies. Upon receiving a bona fide dispute, the reporting agency will conduct an investigation, including requesting verification from the creditor.

 

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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.