HOAleader.com - Tip of the Week - August 5, 2016
Published: Fri, 08/05/16
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Credit Bureau’s Action May Jack Up Your HOA’s Liability
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In this week’s tip, we report on a change that may dramatically increase your HOA’s liability.
Under a recent partnership between credit reporting agency Equifax and Sperlonga, a data aggregation business, community association assessment payments should begin appearing on consumers’ credit reports. That’s raising some concerns among HOA experts.
The timing on this new credit reporting is in flux, according to Chris Hobday, Nashville-based vice president of USIS programs and exchanges at Equifax. The plan is to begin full reporting nationwide in October, he says, though that could change based on the findings of a pilot program in select areas that Sperlonga is hosting.
Under the program, property management companies and some large HOAs will report to Sperlonga owners’ assessment payment information. That data will then be provided to Equifax for inclusion on consumer credit reports.
“My objective here is to do a better job to get homeowner data onto the consumer credit file,” says Hobday. The company has been working on getting the millions of U.S. renters’ monthly payments included on credit reports, and he says owners’ assessments are the next logical step.
“That’s a significant expense for many homeowners,” says Hobday. “There’s a tremendous population there as well. Our overall desire is to make sure home-related costs find their way to credit reports and to provide consumers another avenue to help them build their credit. We’re going to do what we can do to capture as much of the population as possible.”
Most of our experts (but not all) aren’t excited about this plan, to put it mildly.
“I find this to be impossible from a number of perspectives,” asserts Andrew Schlegel, CCAM®, executive vice president of community management for Orange County and Los Angeles at FirstService Residential-California in Aliso Viejo. “Six to seven years ago, when everything went really bad in the economy and housing market, everybody wanted to do this. All the boards said to me, ‘We’ve got to ding delinquent owners’ credit!’
“I called several reporting agencies and talked to them about it, and I went as high up in their organizations as I could go,” recalls Schlegel. “They said, ‘We can’t do that.’ They said there’s no credit arrangement between an HOA and a member. Community associations are membership organizations.
“The HOA’s recourse for delinquencies is to get late fees and fines and to eventually kick owners out if they can’t pay, and an HOA can do that through foreclosure,” states Schlegel. “To me, that’s the recourse. There’s no credit arrangement, like with an auto loan, that says, ‘You’ll pay this at this interest rate.’ I’m surprised Equifax said they’d look at this.”
Hal Kyles, a partner at Denver’s Orten Cavanagh & Holmes LLC, which represents more than 600 associations in Colorado, acts as a collection attorney for many of those clients. He’s absolutely against his clients’ participation. Read about his concerns in our new article: http://www.hoaleader.com/members/1409.cfm
Best regards,
Matt Humphrey
President
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Brand-new Special Report!
HOA Debt Collection from A to Z:
How to Create and Implement a Debt Collection System at Your HOA
Conscientious board members are eager to know how to collect the money their association is due from members unwilling or unable to meet their obligations.
In this report, our editorial team and experts on HOA law, management, and collections from across the country provide information you can begin implementing immediately to collect money due your association more quickly and easily.
Members can download your copy now:
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Recent articles posted at HOAleader.com:
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Are Owners Violating Your HOA's Pet Rules? How to Simplify Your Pet Policies and Make Enforcement Easier
Did you miss yesterday's webinar on smart HOA pet policies and enforcement? If you did, you missed a great session. But it's not too late! You (and your entire board) can watch this must-attend webinar as a recording. You'll hear two community association lawyers with decades of hands-on experience in advising associations share their best advice.
Click here to order your access or learn more:
http://www.hoaleader.com/products/simplify-hoa-pet-policies-enforcement-b.cfm
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HOA Owners May Soon See Assessments on Their Credit Reports: Good News or Bad?
Under a recent partnership between credit reporting agency Equifax and Sperlonga, a data aggregation business, community association assessment payments should begin appearing on consumers' credit reports. That's raising some concerns among HOA experts.
Click here to read full article: http://www.hoaleader.com/members/HOA-Owners-May-Soon-See-Assessments-on-Their-Credit-Reports-Good-News-or-Bad.cfm
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Are Owners Violating Your HOA's Pet Rules? How to Simplify Your Pet Policies and Make Enforcement Easier
Did you miss yesterday's webinar on smart HOA pet policies and enforcement? If you did, you missed a great session. But it's not too late! You (and your entire board) can watch this must-attend webinar as a recording. You'll hear two community association lawyers with decades of hands-on experience in advising associations share their best advice.
Click here to order your access or learn more:
http://www.hoaleader.com/products/simplify-hoa-pet-policies-enforcement-b.cfm
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When Secret Meetings with Your HOA's Attorney May Be Wise
In this week's tip, we answer a reader's question about whether it was wrong for board members to contact the association attorney without getting full board permission. They argued it was necessary because they were concerned other board members might have been giving themselves special treatment not given to owners.
Click here to read full article: http://www.hoaleader.com/public/When-Secret-Meetings-with-Your-HOAs-Attorney-May-Be-Wise.cfm
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Strong Allegation: Condos Are Fleecing Residents
In this week's tip, we nudge you and ask, "Do your fees break your state's laws?" Apparently, many condos in Miami do just that. The Miami Herald has published an analysis of fees charged by local condo associations to owners and renters concluding that many are "ripping off" residents in violation of state law--and it predicts the practices could lead to class action lawsuits against the associations.
Click here to read full article: http://www.hoaleader.com/public/Strong-Allegation-Condos-Are-Fleecing-Residents.cfm
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Here's What Happens When You're Loose With Your Building's Access
In this week's tip, we tell you about a Minnesota court ruling challenging a condo association's practice of allowing police unfettered access to common areas.
Click here to read full article: http://www.hoaleader.com/public/Heres-What-Happens-When-Youre-Loose-With-Your-Buildings-Access.cfm
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