Community associations today find more members fail to timely pay assessments the community needs. If voluntary compliance, Board or manager efforts fail, how long will it take to collect through the legal process? How can an association cut that time?

Associations may recover delinquent assessments by foreclosing on Associations’ liens against delinquent units or by enforcing the unit owner's personal obligation to pay. Personal judgments are usually faster and simpler than foreclosures. In either case, associations typically recover all incurred legal-collection costs. This article focuses on “the fast lane,” enforcing an owner’s personal obligation.

Once an association refers an owner for collection, we verify the delinquent balance, the correct owner and the association’s right to collect all elements of the balance. Next, we usually send a payment demand letter and record a lien against the property if one has not already been recorded. Our goal is to send a demand letter within two business days following referral of a new account.

Federal and state law mandates a thirty-day wait after the letter is deemed received by the debtor before any further action can be taken. In many cases, no further action is required because the debtor pays the delinquency in full or enters into a plan to pay in full over a few months.

If the case remains unresolved after the thirty-day wait, we then prepare and serve on the owner a county court lawsuit. After allowing for service of process and court mandated deadlines, the debtor is typically required to appear in court 67-90 days after the case was referred. Difficulties in obtaining legally-sufficient personal service can extend this time. Many cases resolve prior to a judgment, again by payment in full or payment pursuant to a payment plan approved by the court. Many of the remaining cases result in judgment in the Association’s favor by default, when the debtor fails to appear in court and fails to make other arrangements.

If the debtor forces a trial, it is generally held 150-210 days following the original referral of the matter.

Once judgment is obtained, the owner still may not pay. Then we must locate bank accounts, employers or other assets that can be garnished. The garnishment of wages, bank accounts and rents can take five months or more before the total judgment amount, plus post-judgment interest and costs are received by the association.

In summary, many delinquent-assessment collection referrals result in payment-in-full within weeks. However, difficult cases may take 6 months to a year before an association receives payment of delinquencies and legal fees.

Tips to Cut the Time:

1.         Refer delinquent accounts when balances are small (approximately 90 days). Owners can easily pay up both delinquencies and legal fees. Large delinquencies are hard for an owner to pay, even over time. They tempt the debtor to string out the process, even though the ultimate result is the same but the legal costs the owner pays are higher. Large delinquencies often accumulate because of other debtor difficulties. Those difficulties can result in delays because of bankruptcy or mortgage foreclosure.

2.         Tell us when delinquent owners are home and where they live, if not in the unit. This information eases initial contact and avoids delays in tracing owners and in serving a lawsuit if the case goes that far.

3.         Tell us where delinquent owners work and bank. Phone numbers (work and home) and copies of past checks paid to the association are especially useful. Months can be saved by avoiding public record searches and court processes to learn this information.

4.         Keep and provide good records. Good, timely-available records reduce debtor resistance.

Associations not only need to collect assessments, they need to collect them timely. Simple steps like these allow associations to cut legal-process delays.

For a foreclosure feasability checklist and judicial foreclosure process flow chart, click here to read "Foreclosure of Assessment Liens"