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  • Wise Property Solution

Tips to Create a Strong HOA Collection Policy

When collections fall short in a homeowner association, every owner feels the impact. Late and unpaid assessments affect an HOA’s ability to pay for community maintenance and services that are critical for thriving neighborhoods. While most associations have basic collection guidelines in place, many lack a collection policy with the details that offer consistency and effectiveness. Here are some tips to help you get a jump on developing a strong collection policy.

Develop clear collections policies before you need them. Determining your course of action before homeowners fall in arrears can help protect the association for claims that collection efforts are arbitrary. In addition, clear policies that contain collection steps help your HOA Board take the right action at the right time.

Include key dates and penalty amounts. Homeowners need to understand the date the assessment is due, the date the payment is considered late and how the penalties accrue. In addition, your policy should outline how late payments will be applied to penalty amounts and outstanding assessment balances.

Outline legal actions for delinquent assessments. This section in your collection policy should include how late notices are sent as well as the actions and associated dates that homeowners can expect when they are delinquent. You should include attorney fees, liens, late payment fees, etc. State statues, federal regulations and governing documents should be considered in this area. Obtain advice from your HOA attorney or property manager to make sure that your policy conforms to legalities.

Summarize possible foreclosure provisions. Many homeowners aren’t aware of how liens, foreclosures and bankruptcies work with HOA assessments. It’s a good idea to outline some of these details in your collection policy as information.

Apply your collection policy. You’ve planned the plan; now work the plan without deviation. It’s important that the Board enforce its collection policy consistently for each homeowner. Every policy contains a series of steps that are intended to motivate homeowners to pay their assessments.

If your Board isn’t comfortable pushing homeowners to pay assessments, don’t allow your community to suffer. Hire a property manager to take care of collections because for them, collections are business as usual. Maximizing your assessment collections will help you keep your community operating at its best.


Wise Property Solutions is a property management company serving East Tennessee with offices in Knoxville, TN and the Tri-Cities, TN-VA. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management.

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