I can tell you this………delinquent accounts are on the rise. And this is before mandatory reserves and for many, mandatory inspections and repairs kick in. It’s as if the economy, meaning food prices, gasoline and the soaring of insurance rates is causing this delinquency all on its own. Owners are definitely falling behind in their assessments owed to their associations.
So what’s an association to do? Well, there’s a mandatory pathway to follow for both condominium associations and homeowner associations.
Step One: the association must provide the delinquent unit owner with a notice, providing the owner one chance to pay up within 30 days, and if they do so, there can be no charge for attorney’s fees and costs.
Step Two: If the owner does not take advantage of the opportunity and 30 days go by without the account being brought current……the delinquent owner next gets a 45 days notice of its intent to file a lien against the property should all amount due, including costs and attorney’s fees, late fees and interest, not be paid in full.
Step Three: The Association records a claim of lien against the property in the county where the property is located.
Step Four: The association sends another 45 day letter to the delinquent owners informing them that a lien has been filed against their property and that if the amount of the lien is not paid in 45 days, a foreclosure will be filed against the property in the county where the property is located.
If 45 days has gone by and the account is still not brought current --- a foreclosure complaint can be filed in court. And now it becomes truly expensive because the cost of filing that foreclosure action is several thousand dollars.
As you can see, before getting into court, the association must give a delinquent owner a 30 day letter and 2 forty-five day letters. That’s 120 days advanced notice before being allowed to file a foreclosure action. So, it may not be smart to first wait a few months before taking any action to collect amounts owed to the association.
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