Debt collection can cast a pall over the relationship between the managers and residents of an HOA community, but recovering delinquent payments is essential for maintaining a financially successful neighborhood.
Furthermore, more harm can be done to community relationships when a neighborhood lacks a sound collection policy than when it has one.
If the process of recovering payments drags on, the collector and the debtor become increasingly frustrated, and less likely to come to terms.
Having a fair collection policy prevents this from happening.
For board members, the key is to determine what constitutes a fair policy -- a task with which HOA management companies can help.
Establishing a Fair Policy Debt collection policies differ from community to community, but all association-governed neighborhoods do well to implement certain principles in their policy -- rules that help the community meet financial obligations, and assist residents with bringing their account current with the least amount of financial inconvenience.
Below are examples of rules that providers of HOA management services recommend neighborhoods to include in their collection policy.
Start With a Friendly Request Nothing gets the collection process off to a bad start like an officious letter, email, or telephone call that makes the debtor's money seem more important than his humanity.
Residents who owe money know that the process can escalate until it reaches the legal level, so there is no harming in beginning the process with a friendly request for repayment.
In many cases, such a request generates the desired result.
Treat All Debts the Same Some boards make the mistake of pursuing large amounts of money more vigorously than small amounts.
In addition to making the association seem biased and money hungry, pursuing one debt over another can make those who owe smaller amounts feel as if repayment isn't important -- a point with which HOA management companies would disagree.
If the board doesn't have time to pursue every arrearage, it should delegate debt recovery to a provider of HOA management services.
Let a Third Party Handle the Process Using HOA management companies to recover late assessment fees is a smart move on two levels: it prevents strained relations between board members and residents, and it prevents residents from using personal relationships with a board member for leverage in payment negotiations.
If board members in your community experience difficulty recovering late fees, they should consider outsourcing the task to a third party.
Conclusion Recovering late assessment fees and other debts is essential for meeting the financial obligations of an association-governed community.
If your neighborhood needs help recovering delinquent payments, letting a provider of HOA management services handle the collection process is the best option.
Furthermore, more harm can be done to community relationships when a neighborhood lacks a sound collection policy than when it has one.
If the process of recovering payments drags on, the collector and the debtor become increasingly frustrated, and less likely to come to terms.
Having a fair collection policy prevents this from happening.
For board members, the key is to determine what constitutes a fair policy -- a task with which HOA management companies can help.
Establishing a Fair Policy Debt collection policies differ from community to community, but all association-governed neighborhoods do well to implement certain principles in their policy -- rules that help the community meet financial obligations, and assist residents with bringing their account current with the least amount of financial inconvenience.
Below are examples of rules that providers of HOA management services recommend neighborhoods to include in their collection policy.
Start With a Friendly Request Nothing gets the collection process off to a bad start like an officious letter, email, or telephone call that makes the debtor's money seem more important than his humanity.
Residents who owe money know that the process can escalate until it reaches the legal level, so there is no harming in beginning the process with a friendly request for repayment.
In many cases, such a request generates the desired result.
Treat All Debts the Same Some boards make the mistake of pursuing large amounts of money more vigorously than small amounts.
In addition to making the association seem biased and money hungry, pursuing one debt over another can make those who owe smaller amounts feel as if repayment isn't important -- a point with which HOA management companies would disagree.
If the board doesn't have time to pursue every arrearage, it should delegate debt recovery to a provider of HOA management services.
Let a Third Party Handle the Process Using HOA management companies to recover late assessment fees is a smart move on two levels: it prevents strained relations between board members and residents, and it prevents residents from using personal relationships with a board member for leverage in payment negotiations.
If board members in your community experience difficulty recovering late fees, they should consider outsourcing the task to a third party.
Conclusion Recovering late assessment fees and other debts is essential for meeting the financial obligations of an association-governed community.
If your neighborhood needs help recovering delinquent payments, letting a provider of HOA management services handle the collection process is the best option.
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