More and more states are approving legal recreational use of marijuana. However, that doesn’t mean every neighborhood wants it around. If it’s already legal in your state, or if it becomes legal in your state, there are some steps you should take to prepare your residents for it.
The HOA May Be Able to Prohibit It
Even if using and growing marijuana becomes legal in a state, that doesn’t mean HOAs have to allow their residents to smoke or grow marijuana. The change in law is designed to protect marijuana use from government regulation, but that doesn’t mean it can’t be privately regulated by a homeowner’s association. However, if the governing documents don’t already prohibit marijuana use, the board should think long and hard before adding it as it may upset many homeowners and be seen as the HOA trying to control the homeowners’ private lives. 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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