So this blog will discuss the collection process from the association’s perspective. It will tell you what the association must do if it wants to attempt to collect from an owner who is not paying their assessments. It does not tell you what to do if the bank already started foreclosure proceedings or if the bank started foreclosure proceedings after the association has started their own collection process. Those issues are for another day. And…..believe me…….there is never the perfect answer that is going to get you back everything you are owed unless you sometimes get lucky.
In any event, up until about a decade ago, if an owner failed to pay assessments, the association could file a lien against the unit and threaten a foreclosure action. The law has changed. Now, in a condo, the association must first send a letter to the owner explaining all amounts that are owed and threaten to file a lien if the owner does not come current in 30 days. The letter demands late fees and interest if allowed under the declaration and attorney’s fees. In an HOA, a 45 day letter is required.
If the owner does not pay, after 30 days the association can file a lien. The association must also send a letter to the owner that provides a copy of the lien that has been filed, and letting the owner know that the association will file a foreclosure action in 30 days if all amounts are not brought current. In an HOA – it’s 45 days.
Within the next few weeks hopefully the association gets paid in full or an agreed payment plan is entered into. If not, it’s off to court and now it gets really expensive. There’s filing fees, process server fees and of course, attorney’s fees.
Next week, we’ll talk about what happens next and whether the association must a cept partial payments and how they are to be applied.