S.M. from Franklin County, Ohio writes:
Dear Mister Condo,
Mister Condo replies:
S.M., relying on your management company to collect delinquent common fees really isn’t a sound strategy unless the management company is partnered with a collection agency that specializes in collecting those fees from the delinquent condominium owners. In fact, if you take a good look at the previous management company’s contract, the topic may not even have been covered. Regardless of how the previous management company handled or mishandled the delinquent fees, the Board has a fiduciary duty to the association to collect any and all delinquent homeowner fees. Common fees are the lifeblood of any condominium. All of the services from management to insurance to trash removal to amenity and common element upkeep depend on the fees coming in as budgeted for. Delinquency also hurts the owners who are paying on time by putting them at risk of special assessment. My advice is to hire an HOA collection agency that specializes in collecting these funds. You could also work directly with the association’s attorney who will likely place liens on the delinquent units and, if necessary, foreclose. However, the lien and foreclose process does not generate income for the association. In fact, it puts the association at greater risk because it will have to pay the attorney regardless of the outcome. The HOA collection agency, on the other hand, will focus on getting the funds from the delinquent homeowners. I need to offer full disclosure here and let you know that I actually work for such a firm. Axela Technologies has a very successful track record of collecting funds for associations like yours. In fact, they routinely recover fund 19 out of 20 times without the need for referring the delinquent homeowner back to the association for foreclosure. With that kind of success record, I would think that is exactly the type of help your association would benefit from the most. All the best!