A.D. from Broward County, Florida writes:
Dear Mister Condo,
I am a newly appointed at-large Board Member (filling a vacancy from a Board Member who has left the community). We have almost 300 units at our condominium. Reviewing the Monthly Financials at my first Board meeting, I can see that 20 unit owners are 30 days behind in their common fees and 15 more are 60 days or more behind in their common fees. The President says that because of COVID, the Board decided to give folks that needed it an extra 30 days to pay their common fees. Being a retired CPA, I looked at last year’s records and the numbers were about the same, just a little bit lower. I am not in favor of this policy but since I am new on the Board, I don’t want to “rock the boat”. Do you have any suggestions?
Mister Condo replies:
A.D., welcome to the Board and the wonderful world of association governance! Your experience as a CPA will be a great asset to your association. You are wise to notice the slight trend upward in unit owners who are delinquent (behind) in their common fees. Your community is not alone. In fact, the Community Associations Institute (CAI) has just released a statement indicating as much (https://hoaresources.caionline.org/covid-19s-financial-impact-on-hoa-assessments/).
While I applaud your Board for their sensitivity in allowing some extra time for delinquent homeowners to get caught up, I can’t endorse that as a best practice. Allowing unit owners to fall behind on their common fees and assessments is troublesome to the financial affairs of the association and just plain unfair to the good-paying owners. Let me be fully transparent here. I work in the field of HOA collections and my company has just released its own statement of the trend. You can read that full article here: https://www.axela-tech.com/blog/community-associations-institute-warns-of-pending-hoa-delinquencies/Just because you are “new” to the Board doesn’t mean you shouldn’t speak up when you disagree with a policy. In fact, armed with knowledge and outside resources such as the two articles I have referenced for you here, it is time to speak politely and make the business case for pursuing delinquent homeowners in accordance with the association’s governance documents. If the Board is interested in taking a less drastic approach than turning them over to the association attorney who will charge big fees to “lien and foreclosure” on units, may I suggest an HOA collection agency? Axela Technologies, the company I work for, is in the business of ethical collections. We work with homeowners to get them upright with their association. The work is merit-based at no cost or risk to the association. This would be an excellent business practice that helps both the association and the delinquent homeowner. At the end of the day, isn’t that what it’s all about? Good luck!