Collection Policy

An effective Collection Policy is probably the most important of all policies that a homeowner association can have.  Without money, the HOA won't be able to pay for services.  This sample resolution should be modified to conform with applicable state statutes and your governing documents.  Before implementation, it should be reviewed by an attorney specializing in homeowner association law in your state.


Nottacare Condominium
Sample Administrative Resolution # ___
Collection Policy

WHEREAS, Section _____ of the By-Laws of the Nottacare Association grants power to the Board of Directors to conduct Association business, and Section ____ of the Declaration and Section _____ of the By-Laws grants the authority to levy assessments against owners. And because the Association’s economic well-being relies on the timely payment of assessments and other allowable charges. And because it is the Board's duty to use its best efforts to collect funds owed to the Association,

LET IT BE RESOLVED THAT these collection procedures shall be followed:

1. AMOUNTS PAYABLE TO THE ASSOCIATION include, but are not limited to, regular assessments, special assessments, rules enforcement fees, repairs to the common area that are an owner's responsibility, legal fees and other costs associated with collection of funds on behalf of the Association.

2. PAYMENT SCHEDULE. The regular assessment is payable in advance on the ____ of each month. Fees not received or postmarked by the ____ of the month will be considered past due. 

3. LATE FEES, NSF & INTEREST CHARGES. 

  • A late fee of $_____ shall be charged monthly on all delinquent balances. 
  • A $____ NSF (Non-Sufficient Funds) charge will apply to any returned check. 
  • Any balance older than 30 days will incur an interest charge of ___% per month until paid.

4.  ORDER OF CREDITING PAYMENTS.  Payments received shall be first applied to assessments owed, then to late charges, interest, or collection expenses.

5.  PROCESS FOR DELINQUENCY NOTIFICATION.  For all balances exceeding $_____ that are thirty (30) past due, the following notification process applies:

  • FIRST NOTICE.  First Notice of Past Due Charges including detail of assessments, late fees, NSF charges, interest and other charges that apply will be sent by First Class Mail to an owner whose balance is thirty (30) days past due.
  • SECOND NOTICE.  Second Notice of Past Due Charges including detail of assessments, late fees, NSF  charges, interest and other charges that apply will be sent by First Class Mail to an owner whose balance is sixty (60) days past due.
  • 10 DAY DEMAND.  10 Day Demand for Payment including detail of assessments, late fees, NSF charges and interest charges that apply will be sent by First Class Mail to an owner whose balance is seventy five (75) days past due.  This Notice will recite intent to turn the matter over to an attorney for collection enforcement if balance is not paid within 10 days.  Attorney actions include but not limited to filing a lien  against the owner's property, a personal judgment against the owner and property foreclosure.

6. LEGAL SERVICES. If a delinquent account is referred to an attorney for collection, the owner shall be charged the Association's reasonable attorney fees and related costs.

7. OTHER CHARGES. The Association may charge the owner for:

  • Fees charged by Property Manager to collect funds payable to the Association,
  • Owner bankruptcy,
  • Foreclosure action or deed in lieu of foreclosure,
  • Notification, filing and satisfying liens,
  • Enforcement of the Association's Rules, Bylaws, Declaration or Policies,
  • Costs of litigation
  • Repairs to the Association's common areas that result from the acts of owners, their tenants or guests.

8. DEBT COLLECTION OPTIONS.   In order to collect a debt owed to the homeowner association by a member, the following  options may be invoked to satisfy that debt:

  • Garnishment of member's wages
  • Seizing of member's personal property
  • Suspension of amenity privileges (like pool, clubhouse, tennis courts, etc.)
  • Suspension of voting rights
  • Suspension of homeowner association provided utilities
  • Collection of rents being generated by member's homeowner association unit or home.
  • Foreclosure of member's homeowner association unit or home

Recorded in the Book of Minutes: ___________, 201 __

Date:_____________________, 201___

___________________________________
President - Board of Directors

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