In a 2014 survey performed by the Foundation for Community Association Research, a group of 800 American adults residing in homeowner associations, condominiums, and other planned communities were asked, “What do you think your community association should do when residents neglect to pay their assessments?”
73% of homeowners insist that every member of the associations pay assessments. Unfortunately, due to economic hardships, homeowners who fall behind on their payments are not likely to have enough money to pay all that is due in a single payment. In the same survey performed by the Foundation for Community Association Research, 12% of the participants admitted being behind or past due on their association assessments. Of this group they were also asked if the associations attempted to work with them in some way, such as offering a payment plan, partial payment or deferred payments? 74% said the association did attempt to amend their financial situation.
Most, if not all communities, have a collection policy that outlines the timeline of collecting delinquent assessments. These policies may include a payment plan option that helps homeowners avoid incurring additional costs such as demand fees, lien costs, and attorney or collection charges, as well as negative information reporting to the credit bureaus.
Understanding that every household is uniquely different when it comes to finances, Customer Care Manager Renee Bibbins said “establishing a solid collection system that includes payment plans, will help both homeowners and associations get back on track financially.”
AAM recognized the need to provide communities with a solution to offer homeowners the ability to bring their account current so that they become productive paying members of the Association. AAM worked closely with our attorney to create a new policy, which was shared with our communities. This collection policy, which can be adopted by communities through the board of directors, gives delinquent homeowners a longer term in payment arrangements, and to date has proven to be worthwhile for our associations’ bottom line.
Bibbins explained, “When we set up a payment plan we look for a win-win scenario, where both the community and homeowner benefit. Our plans outline all of the terms and conditions of the payment agreement. We also provide the homeowner with a complete breakdown of all charges, including assessments, late charges, and interest.”
Many of the previous collection policies allowed for a six month term to bring past due balances current. Unfortunately for many homeowners this timeframe to bring the account current was impossible. The newly structured collection policy allows for longer payment terms based on the past due balance owed. It also allows for our Customer Care
department and Community Managers to work directly with the homeowner in creating a workable and acceptable plan to bring their past due balance current while maintaining the payment of their current dues.
AAM is passionately focused on improving life within the communities we manage. We’re passionate about delivering exceptional service. And, we believe in constantly looking for new ways to improve our performance so each community gets the care it deserves. If your community would like to review the terms of your current collection policy or if you have questions about payment plans, please contact your Community Manager.
*2014 National Research by Public Opinion Strategies. Survey of 800 American adults residing in homeowner associations, condominiums, and other planned communities, collectively called “community associations” Reprinted with permission of Community Associations Institute (CAI). Verdict: Americans grade their associations, board members and community managers.