Property owners are contractually obligated to pay their membership fees. These fees help maintain the HOA by providing the following services.
- Community maintenance
- Lawn care
- Snow removal
- Landscaping
- Pool, gym, and other amenity upkeep
- Other services
Obviously, member fees are important for running an HOA. They provide the income the community needs to function well. When an HOA member refuses to pay, it can greatly harm the community.
In the rest of this article, we will tell you how to handle the situation the next time an HOA member refuses to pay.
Tips for Handling an HOA Member Who Refuses To Pay
Are you struggling to get an HOA member to pay? If so, the solution will not be to sue the owner immediately. Instead, follow the tips below.
1) Send reminders.
Send payment reminders to all your owners regularly. Sometimes people legitimately forget to send in their payments. If a particular owner continues to be late on a payment, you may want to send them extra reminders.
In your payment reminders, outline how many days the person must pay before more dire consequences occur. Documenting the payment process as much as possible will ensure owners cannot claim a lack of knowledge when payments are due.
2) Allow a grace period.
In addition to your payment reminders, also include a grace period. As the reminder notifications get sent, you should reduce the grace period amount. For example, most boards provide a grace period of 5-15 days before taking further action.
Giving the residents time to pay their fees may save your board time in the long term. The resident could pay during the grace period, which keeps you from having to track them down and escalate the situation.
3) Provide a payment plan option.
Sometimes owners fall on hard times, which does not mean they should be exempt from paying their fees. However, you should have the plan to help a struggling owner pay. Provide them with payment plan options.
Most HOAs use either 6-month or 12-month payment plans. Set up whatever plan works best for bringing the owner fully current in a reasonable amount of time. Remember to include the consequences of failure to pay as part of the payment plan agreement.
4) Contact an attorney.
Sometimes owners just will not pay. In that case, it may be time to bring in an attorney. If you have taken the above three steps and still have not recouped your money, then contacting an attorney is your best option. They can advise you on the next steps and help you file any actions you decide to take against the owner.
5) Take legal action.
Finally, you may have to take legal action against an owner who will not pay. You could file for garnishing their wages or restricting their access to the community. However, many HOAs decide to file a lien. This action is cheaper than garnishing wages. Your attorney can help you determine the best legal action for your HOA.
Handling an owner that will not pay can be extremely stressful. Following the steps in this article will increase your likelihood of receiving the money owed to your HOA. To learn how to handle other common community problems, contact D.H. Bader Management.