Category Archives: Reserve Funds

12 Months Delinquent… What Now?

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?

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Revoking Amenities for Delinquent Dues

shutterstock_88399096Collecting dues from residents who are behind on payment can be a constant struggle for HOAs, especially in tough economic times. While residents who plead financial hardship are often telling the truth (though the weak economy and a soft job market also provide a perfect excuse for residents who could pay, but have chosen not to), non-payment of dues still costs HOAs money that needs to be spent on the upkeep of the community. Because of that, residents often need to be made to feel pressure that gets them to become current with their payments. One of the most common measures an HOA can take in these instances is revoking the use of amenities. If used effectively, taking away amenities is a great way to encourage residents who are behind on their payments to get back in the association’s good graces.  Continue reading

Why Reserve Funds are Necessary

shutterstock_113313148No one likes to spend their hard-earned money on community association dues. Just like taxes, everyone complains about having to pay them and resents it when they go up. Sometimes an HOA will try to please their residents by avoiding fee increases and dipping into their reserve funds to cover a rise in costs. As attractive an option as this may seem, it is one that sacrifices long term planning for short term comfort. Not only that, but depleting the reserve fund in the name of saving residents money is often a road to costing them even more money when an emergency happens.  Continue reading