Unplanned financial downturns can create disorder in any situation, personal or business. When life happens to deal an unfavorable hand, some are left trying to decide which bills hold a higher priority over others. Which is more important? Your electric bill or your car payment? Your HOA dues or your mortgage? Unfortunately, these scenarios are real life scenarios some homeowners are faced with, and the Associations they live in feel the sting of that reality.
AAM has a unique perspective to see the impact from both sides. Based on our experience, we have identified 5 things Boards should consider when escalating the collection process and considering Small Claims collections.
1. Not Every Situation is the Same
Your community includes some people facing unfortunate situations beyond their control. Even though we may not know these homeowners personally, they should be treated with empathy. Associations want their homeowners to be happy and feel confident that the Association and the management company is looking out for their best interest.
2. Availability is the Key to Success
Building and maintaining a relationship with a homeowner that is experiencing financial hardship is an effective method to increase collection opportunity. Our Small Claims department offers homeowners free communication via phone and/or email in order to assist and answer any questions they may have. We work closely with them on payment plans and settlement offers, to let them know that they can get caught up over time.
3. Transparency Equals Relief
Small Claims charges a one-time flat fee at the beginning and that’s all. All of the work is done in-house and the current assessments are included into payment plans so homeowners do not fall further behind while trying to catch up. There are no recurring fees to cause the owner to feel they will never become current.
4. Find Value in Cost
Warren Buffet said, “Price is what you pay. Value is what you get.” Many Boards are hesitant to send delinquent accounts to Small Claims because of the up-front cost to the Association. Often Boards choose to send accounts directly to attorneys in an effort to avoid up-front costs, but for the homeowner, this may be perceived as unsympathetic to their situation.
5. Work on Solutions Together
It may be a difficult task to sit on the Board of Directors andactively choose to send an account to an attorney, small claims or a collection agency. AAM fully understands the burden that delinquencies put on our communities and Boards. We also know how the additional stress can effect those homeowners in debt. Small Claims has a success rate of 70% on assigned accounts. We work with the homeowner to find a solution to pay off past due fees, while displaying the necessary empathy and acting in the best interest of the Association.
AAM’s Small Claims division provides total peace of mind to not only our Board members but also to those who need it most, the homeowners. We are diligent about addressing accounts before they fall too far delinquent, giving homeowners multiple options for payment plans or settlement offers. From the very first late notice all the way to Small Claims, the AAM collections department gets the job done for the Association, while treating our homeowners with dignity and respect. AAM’s recommended collection policy meets all state legal requirements and includes a late reminder, demand notice and, if necessary, preparation of a Notice of Lien on the property. Our in-house method of collections is successful because it gives AAM an opportunity to interact directly with our homeowners, allowing them to pay down balances without incurring exorbitant collection costs, which results in a faster recovery for the Association.