The collection of assessments is the backbone of all condominium and homeowners’ associations. It doesn’t matter if your association is new or old, small or large, gated or non-gated, full of amenities or not. Each and every association requires money to operate and, for the most part, that money comes from the members timely paying their regular assessments. Each and every association requires money to operate and, for the most part, that money comes from the members timely paying their regular assessments.
Typically, the collection process begins with your management company providing coupons for the regular assessment to all members based on the adopted budget. If an Owner fails to pay an assessment, the following procedural steps are commonly taken:
- The Association’s management company sends an initial ten (10) day courtesy notice regarding the Owner’s delinquency. This notice serves as a friendly reminder that the Owner missed a payment.
- If payment is not received, the first statutorily required pre-suit demand letter that must be sent is a Notice of Intent to Lien letter (ITL). By law, the ITL gives a condominium Owner thirty (30) days to make full payment before the Association may record a lien against the property. On the other hand, by law, the ITL gives a homeowners’ association Owner forty-five (45) days to make full payment before the Association may record a lien against the property.
- If full payment is not received after expiration of the ITL, a lien may be recorded in the public records of the county where the property is located.
- Next, the second statutorily required pre-suit demand letter that must be sent is a Notice of Intent to Foreclose letter (ITF). By law, the ITF gives a condominium Owner thirty (30) days to make full payment before the Association may file its lien foreclosure lawsuit. On the other hand, by law, the ITF gives a homeowners’ association Owner forty-five (45) days to make full payment before the Association may file its lien foreclosure lawsuit.
- If full payment is not received pursuant to the procedures outlined above, our Firm will order title work in order to reveal any and all encumbrances on the property. All lien holders other than the first mortgage holder must be named as defendants in the Association’s lien foreclosure lawsuit.
- Our goal is to reach a resolution with the Owner, however, if that does not occur our Firm will litigate the case and obtain a Judgment scheduling the property for sale. Foreclosure sales are typically set about 45 days from the entry of a Judgment.
Please note that the above procedure summarizes a typical collection action as it moves through the collection process. At any time, an Owner may make payment to satisfy all of the Association’s assessments and withheld legal fees, resulting in a release of the lien or dismissal of the lawsuit. An Owner and the Association may also agree to a monthly payment plan which will abate or pause the process until the debt is paid in full. Further, if a renter resides at the property, the Association has the option of demanding rents through a court receivership to collect all rents during the lawsuit. A knowledgeable and practiced association attorney can help the Association successfully navigate the collection process to ensure that the best collection strategy is being used for the Association and its members.
Our Firm firmly believes in communication. Therefore, we provide free collection strategy meetings to identify appropriate cases for collection and we also offer monthly updates on all files with our office. All of our attorneys’ fees are withheld throughout the collection process. All attorneys’ fees will be documented, added to the delinquent owner’s account and collected from either the delinquent owner or a third party. The incentive is to settle or litigate the case as quickly and efficiently as possible since we do not collect our attorneys’ fees until there is a resolution (remember, no monthly invoices).
If your community needs assistance with the collection of assessments, please do not hesitate to contact Martell & Ozim, P.A.