Why a Collection Policy is Vital for Homeowner and Condo Associations
The success of every homeowner and condo association depends on its ability to collect fees from owners. But all too often, HOAs deal with late and delinquent fees, which isn’t good for anyone involved. One of the ways you can avoid this problem is by clearly outlining a collection policy. Here are the benefits of creating such a policy for your association.
Collection Policies Save Everyone Time and Money
When association fees are late, it triggers a whole catalyst of events that will undoubtedly cost your association more time and money. The association will have to hire an attorney, project manager, collection agent, and bookkeeper to do their part in collecting the delinquent HOA fees. You’ll have to pay each person their respective hourly rate, and that quickly adds up.
In addition, the process takes up the association’s valuable time. That means the association is less available to work on projects that actually benefit owners in the association. The only way to break this cycle is to have homeowners pay on time, and the best way to do that is to outline a clear collection policy.
Policies Create a Culture of Fairness
Having a written policy about when fees are due and when they are considered delinquent creates fairness. It gets all home or condo owners and board members on the same page about how to handle the situation. This also creates less work for board members because they don’t have to look into how past missed fees were handled. They have all the information they need in the policy.
Policies Can (and Should!) Be Communicated
Part of having a collection policy is making sure you’re doing a good job of actually communicating the policy to owners. No one can follow a policy they don’t know exists. It’s a good idea to send owners friendly reminders before their fees are due. Owners will appreciate these text, email, or phone call reminders, and you’ll appreciate being able to collect fees on time. You can refer to your policy in your message and warn owners of the fees they incur if they don’t make their payments on time. If you have a monthly newsletter, you can also put a reminder there.
To further motivate owners to pay on time, let owners who pay on time know that you appreciate them. Send out an email or text of thanks after owners make their on-time payments. This will encourage them to keep paying on schedule in the future.
Having a Policy on Collections Might be Required
In some jurisdictions, having an official policy on collecting association fees isn’t just recommended, it’s actually required. This is worth looking into. Even if it isn’t required in your area, a formal policy is still in your best interest.
Don’t Let Delinquent Fees Jeopardize Your Association
Even if you have created a policy and clearly communicated it to your owners, delinquent fees may be inevitable. The best way to protect your association from this is by utilizing LM Funding’s services. We provide cash for delinquent dues and then collect them for you, so you don’t get involved in the costly collections process. Find out more by contacting us today!