Homeowners associations provide essential services to their community, maintaining landscaping, regulating community rules and offering neighborhood services. In addition, through hard work and HOA insurance, this group ensures the area remains well-kept and presentable. This upkeep can’t happen without the proper funding, though, and sometimes residents don’t want to or can’t pay. That loss of revenue deters repairs and enhancements. Insurance agents should work with clients to understand how to collect those fees from overdue accounts using an organized and efficient payment plan.
What Can You Expect in an HOA Payment Plan?
Typically, owners pay the HOA once a year or quarter based on how the governing rules mandate fee collection. If people fail to meet the deadline, they fall delinquent, and the board has the right to pursue the obligation legally. However, getting the money could prove challenging at times, especially when residents don’t have the exact amount readily available.
Rather than accepting a total loss and allowing debt to mount, the HOA payment plan permits homeowners to establish a reasonable schedule to catch up on past dues. The committee agrees to break up the amount into smaller portions and create a timeline for the residents with new deadlines that are feasible with their financial status. Instead of fighting for months or years in court, the association begins to collect immediately, putting the money to use for others within the community.
Your clients should work with a legal team to establish guidelines that include the following:
- How much to charge for late payment
- The acceptable methods for payment
- When the resident should pay
- How much to expect per month
- If they agree to waive any current or previous debt
Can You Negotiate Past Due HOA Fees?
For many reasons, some homeowners fail to make an HOA payment. Residents may have lost income, suffered hardships or missed the letter or email. This violation could happen when people live out of town for part of the year or have recently rented or purchased a home.
The circumstances surrounding the error dictate whether your client requires a payment plan. For those with monetary concerns, your client could hammer out a plan that suits the resident’s budget, permitting both parties to get back on track. All other situations demand swift demand with late fees tacked on.
When the group creates an agreement, ensure the HOA lawyer remains involved, and members document communications. The organization should immediately put a lien on the property, establishing motivation for proper follow through. Furthermore, the parties should sit down and request financial statements to verify owners have funds available.
When you sit with your HOA clients, encourage them to find ways to protect their budget, securing proper HOA insurance and maintenance funds. Without them, the community suffers. With them, they gain a boost to enhance grounds and safeguard against potential disaster.
About Kevin Davis Insurance Services
For over 35 years, Kevin Davis Insurance Services has built an impressive reputation as a strong wholesale broker offering insurance products for the community association industry. Our president Kevin Davis and his team take pride in offering committed services to the community association market and providing them with unparalleled access to high-quality coverage, competitive premiums, superior markets, and detailed customer service. To learn more about the coverage we offer, contact us toll-free at (855)-790-7393 to speak with one of our representatives.