We are already starting to see an uptick in the amount of owners falling behind on paying their assessments to their association. It is wise for an association to know how the collections process works in for the board to put in place a policy that works best for the association.

In both condos, Co-ops, and HOAs, the procedure is the same.

To start, the association must first deliver a thirty day written notice of late assessments to the unit owner which specifies the amount owed the association and provides the unit owner an opportunity to pay the amount owed without the assessment of attorney fees.

If the owner fails to bring their account current, the association must then provide the delinquent unit owner with another letter which is a 45 day notice of its intent to file a lien and its intent to foreclose its lien. The association can demand attorney’s fees, interest and late fees in this letter.

If the owner fails to bring their account current, the attorney can record a lien and threaten to foreclose on the lien if their account is not brought current within 45 days. The association can demand attorney’s fees, interest and late fees in this letter.

If after 45 days the owner still fails to bring their account current, the association may file a foreclosure action in court.

Keep in mind that because the unit owner must receive a 30 day letter, a 45 day letter and another 45 day letter, it takes a long time to bring a delinquent owner into court. That is why associations may need to rethink their collection process and start it a little earlier. If not, by the time it gets to court, the owner may by 9 or 10 months delinquent.

Especially in condominium buildings, things are about to get tough. There are now mandatory inspections, mandatory repairs, mandatory fire sprinkler or ELSS installation, a tremendous rise in insurance and the inability to waive reserves. Stay on top of your collections.