No Way, H.O.A.

My homeowners association sent a letter informing us that because there are so many fellow homeowners failing to pay their dues, the association is going to charge the rest of us a special assessment. Few companies can pass the cost of delinquency or default on to their customers like this. Imagine the reaction when you ask a customer to add a little something to his payment so you can pay down someone else’s delinquent account.

Some HOA dues are off as much as 33%. That’s serious. It means they’ll have to forego mowing the common grounds or paying the management company for sending out all of those reminders that if you fail to pay, a lien will be affixed to your property. It’s a lien that is subordinate to the bank that’s about to foreclose anyway. Apparently, for a lot of homeowners, association dues have become a low priority. Imagine that. Times are tough and when you have to decide how to divvy up your unemployment check, internet service will have priority to homeowners’ association dues any day.

I just don’t think sticking it to the homeowners who are paying dues is the answer; particularly if the collection effort has been limited to a sternly written letter. If the squeaky wheel gets the grease, a letter that is probably thrown away along with all of the other junk mail is not the solution. It is at best one of several collection steps.

Perhaps the HOA should consider hiring a collector or two to make collection calls. The risk is of course that they’d be adding another level of expense without realizing a return. But on the other hand, a good persuasive collector may be able to bring in a level of revenue that would, one, pay for the collector, and secondly, help buttress the cash situation. Nothing works like talking directly to a debtor. Talking leads to negotiations and this in turn, leads to some sort of mutually acceptable payment schedule.

These are extraordinary times which call for creative solutions. Property management companies have always had an anathema about communicating with their members in ways other than by mail. In better times, their strategy worked for them. Now, it is not enough to send out a reminder letter and go directly to the lien. Businesses in general will need to adjust how they do a lot of things and how they collect their debts is just one area.

Strategic Credit Management Solutions is dedicated to thinking outside the box. Contact us before you call in a collection agency. Perhaps we can help get you on track. See our website http://powerscredit.com/. Your comments are welcome.