The move-in inspection is an incredibly important step in the process of bringing new residents into a community, but many HOAs don’t handle them with the level of care that they should. An inspection report is a great way to settle conflicts between an HOA and a resident before they escalate to that level. By getting both parties to officially record that they agree about the state of the home and the responsibilities of each, both will be on the same page when it comes to what needs to be done, and will have an official record to check their grievances against when conflicts do arise. Continue reading
The holidays are coming! That means it’s time for potlucks, family get-togethers, and lots and lots of cooking. Many HOAs will be having community potlucks, giving residents a chance to show off their cooking skills and share tasty recipes with their neighbors. For anyone who wants to take part in these annual events but is worried that their cooking skills aren’t quite up to standard, there’s a new piece of technology, Drop (getdrop.com), that will help them find great recipes, prepare them to perfection, and then share them with the world. Continue reading
A recent ruling by the Second District Court of Appeal of Florida may have a big impact on how community associations go about settling debts with delinquent homeowners. This ruling found that if an association settles a check for less than the amount owed that is also accompanied by communication indicating that that check is meant to satisfy the debt in full, then the association is agreeing to accept the smaller amount as a full settlement of the debt. Obviously, HOAs (especially those in Florida) should take this ruling into account when dealing with collections of past-due assessments and fees.
While this ruling is new, it may be used as legal precedent in the future. This means that HOAs hands may be further tied in the future, preventing them from accepting partial payment from recalcitrant owners without giving up their right to take further action against them.
It also means that associations need to tread very carefully when accepting payments. Not only should they check all correspondence that accompanies partial payments of past due fees, but they should also consult with legal council to make sure that they are not setting themselves up for a future finding that they have accepted a settlement amount that they did not intend to be payment in full.
What HOAs Can Do
The first thing that HOAs should do is, obviously, not accept any payments with the statement that it is meant to be payment in full unless a settlement agreement has actually been reached. This is good practice to begin with, but in light of this recent ruling, it is even more important to reject these kinds of payments, or at least take extra measures that one party insisting the debt is now settled without further agreement does not tie the association’s hands.
Secondly, community associations should also seriously consider using a debt collection agency to handle the recovery of past due fees. While this does cost money, it will generally cost less than other legal action that might have to be taken. Additionally, contracting out to specialists in handling debts means that the settlement procedures will be handled by parties who understand the rules, saving the agency time in legal consultation and reducing the chance of costly mistakes being made.
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HOAs have long complained about how difficult it can be to collect delinquent fees that they are owed by homeowners who rent out their homes. In response, some states have taken action to allow HOAs to demand payment from the tenants of properties that have past due rent or fees, even though they are not technically the ones who have an agreement with the association.
While many HOAs are breathing a sigh of relief that they now have more avenues to recoup their losses and put pressure on delinquent accounts, these laws have also created a situation where the people being held responsible are technically innocent parties that have been put in the middle of a conflict they may have no control over. Despite this, some associations are resorting to booting residents’ cars, even those owned by tenants and not delinquent owners. Is this going too far? Continue reading
“Due diligence” is a phrase that gets thrown around a lot, and most people at least have a vague understanding of what it means. But many times, an HOA doesn’t actually follow through with all of the steps that make up proper due diligence. Sometimes this is out of ignorance, sometimes it’s just out of convenience, but not following through on taking all the necessary precautions before entering a contract or making a hire can have disastrous consequences.
What is Due Diligence
Due diligence is, of course, the proper investigation of a person or business before entering into a contract or partnership with them. It’s an important part of successful business operations, especially those of an HOA. Because an association’s business is managing a community where people live, making poor decisions thanks to not doing the proper amount of research can have serious effects on people’s homes and lives.
Steps for Due Diligence for HOA
So what steps should an HOA take to make sure that it is performing its proper due diligence? The following steps are some of the basic requirements:
- Don’t just hire a contractor based on a recommendation. Even if the recommendation comes from someone you believe to be trustworthy, their word is not enough ensure that a contractor is fit for the job. It is a good starting point, but it’s not the end of the process. Look into consumer reports, check that the contractor has the proper permits, and also make sure that they have experience in the job for which you are hiring them.
- If you need to hire a lawyer, find one who specializes in the area of law for the specific issue with which they will be dealing. There are a lot of areas of law, and specializing in the specific areas that a case involves will give the lawyer you hire a much greater chance of getting you a successful outcome.
- Get references from other associations or homeowners. The best way to know whether or not a lawyer, contractor, accountant, or other person your HOA is getting ready to partner with is a good match is to talk with the people they’ve worked with before. If their previous clients have nothing but horror stories or found them hard to work with, it’s best to find someone else. Remember, you don’t have to settle for the first person you find.
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While Facebook, Google+, and Twitter may be the social media sites that get the most press, LinkedIn has become an incredibly valuable online tool for businesses. The all-business social media site is geared entirely toward professional marketing and networking, and provides many tools for property management companies to grow their businesses. Continue reading
A new year is coming, which means it is time for planning out new budgets. Careful budget planning is incredibly important for a community association, as it determines how much money they will have to collect from residents and what projects and services it will be able to complete. Continue reading
How an HOA should handle security is a very touchy issue. Which security measures should be taken, who is responsible for implementing them, and how those decisions can leave a community association vulnerable are all important matters that need to be taken up. While this post does not have all the answers, it is a starting guide for which security-related questions need to be asked first, and how to approach them. Continue reading
When times get tough and money runs short, HOA dues and assessments are often one of the first things to stop being paid. For most people, electricity and credit card bills come first. But, what happens when a resident falls behind on their dues for 6, 7 or even 12 months? Assessments serve an important and necessary function for the community, and associations need to take a stand when serious delinquencies happen. There are several options available, including liens, lawsuits and foreclosure. Which are the right steps to take against residents who have fallen seriously behind?
Sometimes an HOA feels the need to change some of its rules. These can be simple changes, like altering noise bans or facility usage hours, or they can be more severe changes that alter fundamental rules in a community’s charter. When a community finds itself in this situation, one of the most common questions is: do we need a lawyer? Continue reading