What Steps Should Condo/Homeowner Associations Take to Collect Delinquent Receivables?

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Assessments are the lifeblood of any association, as they fund the maintenance, operation, and improvement of the common areas and facilities. When owners don’t pay their fair share, the association suffers financially and may have to cut back on services, impose special assessments, or increase regular assessments to cover the shortfall. Collecting delinquent receivables is not an easy task, but it is necessary to protect the financial health and stability of the association. Please continue reading and reach out to the seasoned Florida condominium & homeowner association collection attorneys here at Ansbacher Law to learn more about the steps you should take to collect delinquent receivables and how our firm can help.

Steps to Take to Collect Delinquent Receivables

Here are some steps that associations should take to collect delinquent receivables effectively and efficiently:

  1. Send a notice of late assessment. The first step is to notify the owner of the delinquency and demand payment within 30 days. This notice must be sent by first-class mail to the owner’s last known address in the association’s records and to the unit address. The notice must include the amount due, the interest rate, and a statement that the association intends to proceed with further collection action if payment is not made within 30 days. Importantly, when possible, we will explore avenues other than liens, such as suing for a money judgment, seeking an injunction, or denying membership privileges to the delinquent homeowner. However, if these are not feasible in your specific circumstances, we will pursue a lien.
  2. Send a notice of intent to lien. If the owner does not pay within 30 days of receiving the notice of late assessment, the association may send a notice of intent to lien by registered or certified mail, return receipt requested, and by first-class mail. This notice must provide another 45 days for the owner to pay all amounts due before the association files its lien.
  3. File a lien. If the owner still does not pay after receiving the notice of intent to lien, the association may file a lien against the owner’s property in the public records. The lien secures the association’s right to collect the delinquent assessment, plus interest, late fees, costs, and reasonable attorney fees incurred in collection.
  4. Foreclose on the lien. If the owner does not pay or contest the lien within 90 days of its filing, the association may initiate a foreclosure action against the owner’s property in court. The association may also seek a money judgment against the owner for the amount owed.
  5. Apply payments properly. When collecting delinquent receivables, associations must apply any payments received from owners in a specific order: first to any interest accrued by the association, then to any administrative late fee, then to any costs and reasonable attorney fees incurred in collection, and then to the delinquent assessment. This ensures that the association recovers its expenses before reducing the principal balance.

Collecting delinquent receivables can be a challenging and time-consuming process for associations. That’s why it’s important to have an experienced Florida Condo/HOA lawyer on your side who can guide you through the legal requirements and procedures involved in collecting delinquent receivables. Contact Ansbacher Law today for a consultation and let us help you protect your association’s interests.