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Should We Get Aggressive with Properties Delinquent on Maintenance Fees?

On Behalf of | Jul 28, 2018 | Condo / HOA, Firm News |


Q: Our current HOA Board is not aggressive with several properties in our community that have been delinquent on maintenance fees going on five years. I am gathering new candidates for the Board who have agreed to foreclose on every one of these properties and get money judgments against the owners if elected to the Board. Can we completely change the direction of the current Board after the election, and is it a good idea to be this aggressive?

A: To answer your first question, yes the new Board can change direction and be more aggressive with collections and foreclosure decisions. However, before the new Board completely changes the association’s collections policies, it is probably a good idea to send out a preliminary notice to the entire community outlining the reasons for the new strategy and providing a brief grace period before the policy goes into effect. That simple notice in itself will likely deter any new delinquencies. With regard to the strategy itself, we have not taken the position with our clients that every delinquency warrants a foreclosure by the association.

There are many moving parts, and the association’s board should examine each case in detail with its legal counsel. The homeowner’s mortgage lender might be aggressively pursuing its own foreclosure on the property, and there could also be bankruptcy issues to consider. Yes, the association can acquire title and potentially rent the property by foreclosing on its lien, but that result does not always result in a positive economic gain for the association. Again, the new Board when elected should meet with its legal counsel to review all delinquencies in detail before deciding on a blanket strategy for all properties.