The foundation of a homeowners’ association’s budget is the income generated by homeowner assessments. When residents pay their homeowners’ association (HOA) fees on time, the association can pay its expenses on time. Vendors are paid, supplies are purchased, and reserve accounts are increased to fund future projects.

Yet what happens if residents fail to make their HOA payments? The association’s dependence on assessment income requires it to take delinquencies seriously. If necessary, a delinquent account can be sent to collections, which means that a third-party collection agent will pursue the payment.

At the same time, these situations require tact. Homeowner relationships must be safeguarded for the sake of community harmony. When a delinquent account goes to collections, it can result in:

Other Ways to Collect on Delinquent HOA Accounts

Since formal collections are usually not beneficial to the HOA or the homeowner, this method should be used as a last resort. Other steps can be taken by an HOA to collect on what it is owed. The association’s bylaws, CC&Rs (Covenants, Conditions, and Restrictions), and state laws set guidelines for methods that can be used. Options include:

When It Is Time for Collections

When other options fail, the decision to send a homeowner to collections should be made based on emotion. Instead, remain professional and consider the following points:

One way to maintain a positive relationship with homeowners is to provide a flexible system for accepting payments. Use an HOA website portal for convenient online options — this allows homeowners the flexibility to pay assessments at any time using a credit card, ACH, eCheck, or another method.

Association management software by CINC Systems includes an integrated collections module to save your management company’s accounting team valuable time by automating communications and fee assessments with the homeowner. The module also integrates with collections agencies to yield real-time data and updates on delinquent accounts.