Following are ten tips that will significantly increase your chances of successful recovery of delinquent assessments:
- Make sure your association has an updated Collection Policy that is distributed at least once a year to the members.
- Start collection activity sooner rather than later. Most associations start serious collection activities when an account is about 45 days overdue.
- Be familiar with all of the different methods of delinquent assessment collection including: Non-Judicial Foreclosure, Judicial Foreclosure, Small Claims Court, Superior Court and Suspension of Privileges.
- Always send a pre-lien letter and record an assessment lien (Notice of Delinquent Assessment) pursuant to a lien resolution no matter what method of collection you choose.
- Evaluate each case separately to determine the most effective method of collection for that individual case.
- Use experienced professionals (management companies, trustee services and attorneys) to handle your collections.
- Move ahead as soon as permitted by law with each step in your chosen collection process. Finish what you start!
- If the owner timely requests Internal Dispute Resolution (IDR) or Alternative Dispute Resolution (ADR), schedule it quickly. Many collection actions get bogged down for months or years with IDR and ADR.
- Engage bankruptcy counsel immediately whenever a delinquent owner files bankruptcy.
- "Waiting for the bank to foreclose" is not a viable collection strategy.
Acknowledgement: Thank you to attorney Richard Witkin of Witkin & Neal for these tips.
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