Understanding the Importance of a Collections Policy for Your Florida Condominium or Homeowners Association

A close-up view of an invoice marked with a red "paid" stamp per the collections policy; details such as invoice number, date, and reference are visible but not focused.

One of the most important functions of a Florida condominium or homeowners association is to ensure it timely collects assessments from its members.  Dealing with delinquent homeowners is a frustrating reality facing most associations. Bad debt prevents the association from properly carrying out its functions and places an unfair burden on the other members who must not only pay their assessments, but also be responsible for covering the budget shortfall.

At Ansbacher Law, we work closely with our association clients to develop effective collection procedures.  When properly implemented and consistently applied, a written collections policy has proven to encourage timely payment of assessments and reduce the number of delinquent accounts.

The best practice is to have a time-based collections policy based on aging of the account, rather than a policy based on a threshold amount due.  We recommend associations adopt, by resolution of the board of directors, a written collections policy that specifies the steps the association will take to secure payment of assessments from its members before referring their delinquent accounts to our collections attorney.

To avoid legal problems or even social problems with neighbors making claims of favoritism, an association must enforce its collections policy uniformly as to all members.

A collections policy should specify:

  • That on or about a certain date, the Association or its community association management firm will mail owners of record an invoice for the Association’s assessment in an amount determined from the new year’s approved budget.  This invoice should clearly state the due date of each payment and the date on which each payment will be considered late.
  • That the Association will mail out one or more reminder notices to owners with accounts delinquent by more than a specified number of days.
  • That accounts that still remain delinquent by more than a specified number of days following the previous notices will be forwarded to the Association’s collections firm with instructions to begin the collections process.

Ansbacher Law’s dedicated collections team is here to help.  To speak with our collections attorney about developing and implementing a collections policy for your community, please call us at (904) 737-4600 today.  We look forward to the opportunity to serve you.