HOAleader.com - Tip of the Week - November 19, 2010
Published: Fri, 11/12/10
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Are Your Assessment Due Dates Helping or Hurting Your Homeowners
Association?
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In this week's tip, we explore the pros and cons of the various
due dates--monthly, quarterly, and annually--for your owners'
assessments.
"When your assessments are due depends," says Robert White,
managing director of KW Property Management & Consulting in Miami,
which oversees about 125 associations totaling 30,000-35,000
units. "We have some associations in which the dues are annual
because they're very small, and you just pay one time a year.
Some are quarterly, but the vast majority are monthly. I don't
have any preference. It's usually determined by the governing
documents, which also dictate when owners must pay and when you
can notice them when they're late."
But you can amend the documents to set other due dates if you
believe that would benefit your association. "This is really a
business decision made by an association when deciding how to go
about collection," says Kyle Hooper, an associate at Atkinson,
Diner, Stone, Mankuta & Ploucha PA in Ft. Lauderdale, Fla., who
represents about 40 community associations. "You can always
modify or amend your documents."
What are the pros and cons of requiring monthly payments? "
With monthly billing, you're sending out more statements, and if
someone's delinquent, you're sending more delinquency letters,"
explains Kristen L. Rosenbeck, a partner at the Mulcahy Law Firm
PC in Phoenix, which represents associations. "Owners may also
face more late fees if payments are required more frequently.
"The flip side is that it's probably easier for owners to
budget smaller, more frequent payments than a larger, one-time
payment," adds Rosenbeck. "This is one of those issues where the
association has to weigh the administrative costs against a lower,
more easily budgeted monthly payment."
Many HOA governing documents also provide for accelerated
payments, which can be especially beneficial with monthly
assessments. "In most governing documents, the association has
the right to accelerate payments," explains Hooper. "If you're on
a monthly payment schedule and an owner misses a month, the
association can accelerate the rest of the year's payments in
hopes of collecting all that up front. You don't have that option
if you have an annual payment. That's why you're finding most
associations going with quarterly or monthly. You're really
leaving a remedy on the table if you go with an annual payment."
To learn the pros and cons of quarterly and annual billing
dates, see our new article, http://www.hoaleader.com/members/507.cfm
Best regards,
Matt Humphrey
President
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