Today?s challenging economic conditions make collecting Homeowners Association fees a daunting task at many communities. According to Martin Laderman, President/CEO of MEM Property Management, there are creative collection methods that can avoid costly litigation.
?Collecting association fees is more difficult because of the large number of people who have either lost a job or had their income reduced by cutbacks,? said Laderman. ?Although, like banks and the Internal Revenue Service, homeowners? associations have the power to initiate foreclosure proceedings, foreclosure is often not the best route to take.?
Laderman explains that foreclosures are time consuming and expensive. Not only do associations incur legal fees in foreclosure proceedings, foreclosures often leave units empty for many months resulting in lost revenue for the association.
?As property managers we take a constructive and positive approach to delinquent dues, often starting with a phone call to find out if there?s a way in which we can help the owner satisfy his or her debt,? comments Laderman. ?If we cannot work out a payment schedule with the owner, we then look to other means that have proven effective.?
In cases where owners seek to abandon their home, MEM Property Management can restore the unit to rentable condition and then lease it to a third party. The rents are used to satisfy the owner?s debt to the association until either the bank takes over or a buyer is found.
Punitive measures that collect payment from owners who are simply avoiding payment include revoking community privileges. Laderman points out that many communities have computerized access cards or key fobs to gated entries, recreational facilities, elevators and other secure areas. It is easy to deactivate these devices in the computer system until all association dues have been paid. Tracking parking permits and towing the cars of negligent homeowners is another option, although this procedure requires clear posting of the policy in accordance with New Jersey law. Associations may also use late fees and interest charges to promote timely payment.
Laderman recommends that associations use monthly billing statements instead of payment coupon books. ?A bill serves as reminder to pay as opposed to a coupon book that can get buried in a drawer and forgotten,? he adds.
Peer pressure is another weapon in the property manager?s arsenal of collection techniques. Posting a list of paid and unpaid dues by unit number on the community bulletin board is effective and avoids lawsuits that could result from identifying the names of homeowners who are in arrears.
?It?s important to remember that preserving a sense of community and cooperation makes life easier on everyone? community association boards, owners and property managers alike,? Laderman concludes. ?When a community runs smoothly and everyone pulls their weight it creates a better living environment, a positive reputation and in turn higher property values.?
MEM Property Management provides full-service property management to New Jersey (NJ) communities including residential apartment complexes, condominiums, townhomes, and new building development. For more information visit MEMproperty.com.
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