BENEFITS OF AGGRESSIVE THIRD-PARTY COLLECTION
DELINQUENCY MANAGEMENT
The collection of assessments is usually the only source of income available to a homeowners association to pay its operating expenses and manage its business and affairs. Failure to pay assessments when due, if only by a handful of associations members, places an undue hardship on the association and its paying membership. Failure to adhere to a firm but fair delinquency policy on the part of an association’s board of directors and/or its management agent can quickly result in delinquencies snowballing within a short period of time.
“ARMS-LENGTH” TRANSACTION
The use of an aggressive third party also allows the Board of Directors and its management agent to enforce all collection activities equally regardless of the delinquent owner’s status. Fiduciary duty requires that all delinquent owners be treated exactly the same, barring extraordinary circumstances. The unique makeup of homeowners associations can often result in improper impulses for homeowners to “bend the rules” for friends and neighbors. The use of an impartial third party allows the “blame” for unbiased collection practices to be directed away from the Board of Directors and its management agent.
LEGISLATIVE UPDATES
Collection activity comprises merely a small portion of the overall responsibilities placed upon a management company. A third party, specializing exclusively in the areas of debt collection and assessment foreclosure is more focused in scope, and therefore always in strict compliance with collection laws. As an association and its management agent relies on the experience and knowledge of its painters, plumbers, contractors and landscapers, so must they on the professionalism and expertise of their collection agent.
By utilizing an impartial collection agent whose primary concern is the swift, efficient and economical resolution to a delinquent assessment situation, potential problems will be avoided before they surface. Communications with delinquent homeowners must be precise, diplomatic and non-confrontational. Further, all rights afforded a delinquent homeowners through elements such as the association’s governing documents and both California and Federal laws and statues (such as the Fair Debt Collection Practices Act), must be adhered to.
The collection of assessments is usually the only source of income available to a homeowners association to pay its operating expenses and manage its business and affairs. Failure to pay assessments when due, if only by a handful of associations members, places an undue hardship on the association and its paying membership. Failure to adhere to a firm but fair delinquency policy on the part of an association’s board of directors and/or its management agent can quickly result in delinquencies snowballing within a short period of time.
“ARMS-LENGTH” TRANSACTION
The use of an aggressive third party also allows the Board of Directors and its management agent to enforce all collection activities equally regardless of the delinquent owner’s status. Fiduciary duty requires that all delinquent owners be treated exactly the same, barring extraordinary circumstances. The unique makeup of homeowners associations can often result in improper impulses for homeowners to “bend the rules” for friends and neighbors. The use of an impartial third party allows the “blame” for unbiased collection practices to be directed away from the Board of Directors and its management agent.
LEGISLATIVE UPDATES
Collection activity comprises merely a small portion of the overall responsibilities placed upon a management company. A third party, specializing exclusively in the areas of debt collection and assessment foreclosure is more focused in scope, and therefore always in strict compliance with collection laws. As an association and its management agent relies on the experience and knowledge of its painters, plumbers, contractors and landscapers, so must they on the professionalism and expertise of their collection agent.
By utilizing an impartial collection agent whose primary concern is the swift, efficient and economical resolution to a delinquent assessment situation, potential problems will be avoided before they surface. Communications with delinquent homeowners must be precise, diplomatic and non-confrontational. Further, all rights afforded a delinquent homeowners through elements such as the association’s governing documents and both California and Federal laws and statues (such as the Fair Debt Collection Practices Act), must be adhered to.