Mulcahy Law Firm, P. C.: Collecting Assessments is Easier through Prompt Action!

Board members often tell Mulcahy Law Firm, P.C. it is the most difficult duty they have to oversee, the collection of association assessments, and dealing with the delinquent owner compounds the difficulty. However, allowing delinquent assessments amounts to increase without action, gives the association membership the impression that delinquencies will not be pursued and that there is little to no consequence for non-payment.

If an assessment is 60-90 days past due, the association should record a notice of lien on the lot/unit. Experience has shown that the longer delinquent accounts are unpaid, accruing additional charges, the harder it will be for the association to collect the delinquent balances.

Turning over delinquent accounts to the association’s attorney is important. By providing this information immediately, the association will avoid additional delays while the attorney investigates. The association should provide the attorney all pertinent information on file: owner’s name, address, breakdown of charges and all correspondence between the owner and the association. If pertinent information is not available, the attorney may have the resources necessary to find such information.

By:  Beth Mulcahy, Mulcahy Law Firm, P.C.

This entry was posted in Collections - Assessments and tagged . Bookmark the permalink.

3 Responses to Mulcahy Law Firm, P. C.: Collecting Assessments is Easier through Prompt Action!

  1. Bonnie Frick, Secretary, birdsong HOA says:

    Foreclose, who pays for past due HOA fees. A new buyer, the holder of the mortgage, or they’re written off? Where is that information found? Thank you

    • admin says:

      Bonnie:

      If a property is lost at trustee’s sale and the foreclosing party holds a first deed of trust, the trustee’s sale would extinguish the Association’s lien and the new owner (either the beneficiary or the successful third party purchaser) would take the property free and clear of any past due amounts owed. The new owner would only be responsible for assessments and other charges that accrue from the date of the trustee’s sale. The former owner would remain personally liable for all amounts that accrued up until the trustee’s sale date.

      If the property were sold to a third party at the trustee’s sale and excess proceeds were generated, the Association could potentially recover the amounts owed through the excess proceeds. The Association could also potentially recover the amounts owed from the former owner by pursuing the former owner personally. However, if both of those options are unsuccessful, the Association may have to write off the amounts owed as uncollectible.

      Thank you.

  2. admin says:

    Bonnie:

    If a property is lost at trustee’s sale and the foreclosing party holds a first deed of trust, the trustee’s sale would extinguish the Association’s lien and the new owner (either the beneficiary or the successful third party purchaser) would take the property free and clear of any past due amounts owed. The new owner would only be responsible for assessments and other charges that accrue from the date of the trustee’s sale. The former owner would remain personally liable for all amounts that accrued up until the trustee’s sale date.

    If the property were sold to a third party at the trustee’s sale and excess proceeds were generated, the Association could potentially recover the amounts owed through the excess proceeds. The Association could also potentially recover the amounts owed from the former owner by pursuing the former owner personally. However, if both of those options are unsuccessful, the Association may have to write off the amounts owed as uncollectible.

    Thank you.

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