Homeowners associations (HOAs) are an important form of local government. They enact rules that apply to all local property owners and help protect the characteristics of the community. They prevent one person’s choices from harming other people’s investments in real estate.
HOAs typically collect monthly fees that help cover operational expenses for community amenities. They hold public meetings where they discuss plans for the community and adopt new rules. They may also need to engage in collection activity when community property owners fail to pay their monthly fees or cover the fines assessed due to non-compliance with HOA rules.
How can HOAs collect on the fees owed by property owners if they don’t submit payment on time?
By sending notice
Frequently, the bylaws for HOAs allow them to assess late fees and interest on unpaid monthly balances and any penalty amounts assessed against property owners. Sending invoices clarifying the total amount owed and also showing what the balance could increase to if the homeowner does not pay within a certain time frame can incentivize people to catch up on their obligations to the HOA.
By limiting amenity access
HOAs may maintain spaces ranging from private gym facilities and swimming pools to playgrounds and recreational areas. Property owners who have not paid their dues or fines may lose access to those spaces or services. Particularly when the property owner has children or regularly makes use of certain community amenities, the possibility of losing access to those services can motivate homeowners to bring their accounts into compliance.
By placing liens and foreclosing
The law allows HOAs to request a lien against real property when the owner has unpaid fees and fines. The lien converts the residence in the community into the collateral for the debt. If the property owner still does not pay what they owe, then the HOA may have to foreclose on the property. The HOA has up to six years to work with the homeowner after securing the lien before the right of foreclosure ends.
Every community has different rules that determine what enforcement actions the HOA can take and when liens are an option. The possibility of losing real estate over unpaid fees and fines can be a strong motivator for those who have likely made sacrifices to become homeowners and maintain their property.
Both those serving on HOA boards and those living in communities governed by HOAs need to understand the ways that the HOA can enforce its fees and community standards. Reviewing what has led to an unpaid balance with a skilled legal team can help property owners or those serving on an HOA board evaluate their options during a dispute about those charges.