During these difficult times many homeowners aren’t paying HOA fees. No one wants to enforce other neighbors to pay past fees, but it’s essential for a community to stay on top of this. The reality is when one homeowner isn’t paying their share of the HOA the others have to pick up the slack. A bad misconception many home owners have is the HOA is a profit center for the community. It isn’t by a long shot. Just a few homeowners who stop making HOA payments cut into an association’s budget quickly.
Nationwide, non-payment of HOA fees is among the top problems facing condo and single family homes says Thomas M. Skiba, chief office of Community Associations Institute in Alexandria, VA. When too many homeowners stop paying lenders may become unwilling to make mortgages or refinance properties in the community. Fannie May, for example, won’t guarantee loans in condominiums where more than 15% of the homeowners are 30 days or more overdue on HOA fees.
HOA committees must act fast to collect overdue HOA fees. Work with distressed homeowners with a payment plan. Seek help from experts about your collection options as your bylaws may govern. Consider taking any community privileges away like, fitness, pool and tennis. If a proper lease is in place you can make the renters pay the HOA direct once it becomes delinquent. Last but not least put a lien on a home that’s delinquent.
It’s now required for a bank or lending institute to pay HOA fees from the day of foreclosure to the day it re-sales. Any prior fees owned are not collectable from the bank or lending institute. However, the HOA can peruse the old homeowner for any delinquent HOA fees as a personal debt. Depending on your bylaws HOA’s may be able to garnish wages or sell back HOA fees to collection agencies.
In this state when you have a mandatory HOA it should be disclosured in the Purchase and Sale Agreement Exhibt Community Association Disclosure and or Sellers Disclosure. Every buyer signs documents at closing acknowledging they know of the mandatory HOA fees and agree to abide by its bylaws. HOA committees have no choice but to enforce them. This helps assure a stable community in many ways.
