Common interest communities are kind of a hybrid of a government, a corporation, and a community. The government component consists of an elected Board of Directors who is responsible for collecting “taxes”, or maintenance dues, for the operation of the community’s common elements. Without these funds, it is impossible to maintain the community in a standard expected by the members. The association’s annual operating budget (including reserves for replacements) is based on the revenue, or maintenance payments, collected monthly or quarterly. One of the most important duties of the community manager is to carefully monitor the operating funds. Residents who fail to pay their maintenance dues make it difficult to pay the bills. The association documents should clearly explain the process for late payments and non-payments, including due dates, late fees and interest.
During the recent Great Recession, many communities suffered with abandoned units, squatters, foreclosures and short-payments due to underemployment or job loss by members in the community. These challenges required managers to get creative about how to work with directors and owners to keep the grass cut and the lights on! Some of the strategies employed over the past eight years, may be still be beneficial for owners struggling to pay their fair share.
If your community is still experiencing a high delinquency rate, have a candid discussion with the board about the possibility of offering different programs for different owners. For example, may owners pay monthly, or bi-monthly instead of quarterly? If permitted, start with a reminder courtesy phone call followed up with the first notice of delinquency letter or e-mail (with pre-authorization). Encourage your board to work with the unit owners to pay on an installment basis, by written agreement. If the owner fails to abide by the agreement, the association may always exercise their right to refer the account to the collections attorney.
Make an effort to be respectful when you speak to unit owners about this sensitive issue. It can quickly escalate into a difficult and volatile situation. Speak plainly and clearly about their options and the repercussions of failing to pay on time. Refer owners to their documents to remind them that it is the policy of their community, and you are simply trying to do the best job for everyone in the association. It may be one of the most difficult areas of the position, but it is a necessary task. You can do it.
Endeavor to persevere.
Tanoa Lynne Poirier is the Managing Principal at Poirier Enterprises Inc., specializing in the management of community associations, commercial and investment properties, and individual residences in South Florida.
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