09/07/2017 : When Some Homeowners Don’t Pay Their Annual Dues, What’s An HOA To Do?
By Benny L. Kass
September 07, 2017
I am president of our HOA (we are self managed) and we currently have homeowners who aren’t paying their yearly dues.
Do we have any course of action, such as liens or collections?
Not sure we can put a lien on the house, it wouldn’t be a mechanic lien. – Steven
Steven, as president of your homeowners association, you have a fiduciary obligation to make sure all owners keep current with their dues.
If you let one owner slip by, soon more owners will say “s/he got away with it, so I won’t pay either.”
Yes, from my experience, most association legal documents – and most state laws – allow the association to file a lien against the owner for nonpayment.
I hope you have read your legal documents because they spell out the process for collecting unpaid dues.
In most cases, the association can recoup its legal fees.
The association also can foreclose on the owner.
You really need to retain a community association lawyer in your area who can guide you through the process.
If you need references, I suggest you contact the Community Associations Institute, which is a national organization that deals with all sorts of community association issues and problems.
You can find it at caionline.org .
I am an owner in a 24-unit resort condo.
The board of directors continually ignores the bylaws and our state condo laws – for example, not holding open board meetings; spending beyond bylaw limits; not answering questions; responding “trust your board,” etc.
My question is: Like a tenant, can I withhold monthly dues and put them in an escrow account until the board follows the bylaws and the condo laws?
What requirements are necessary for such an account? – Andrew
Although unit owners often put their condo fees in escrow (or just don’t do anything), basic community association law is that the requirement to pay the assessment is a separate legal obligation and cannot – and should not – be used as leverage or even a setoff for grievances against the association.
In other words, if you have a problem, you can sue the association, but you still have to pay the assessment on time.
Having said that, my experience (on both sides of this issue) is that if the association sues a delinquent owner, the court will accept a counterclaim against the association.
But to what avail? What do you think you can unilaterally do to change the mind-set of the association?
I recommend you contact all of the other owners, explain the facts and ask if they will join you in this fight.
One way to resolve the problem – if you have enough support – is to recall the board.
Your bylaws will spell out the procedure.
Another way is to file a complaint with the consumer protection division in your state attorney general’s office.
And of course, the ultimate remedy: file suit.
But if you are unable to muster a sizable majority of owners, you have only three options: try to get on the board yourself, put up with the problems or sell your unit.
Benny L. Kass is a Washington and Maryland lawyer. This column is not legal advice and should not be acted upon without obtaining legal counsel. Send questions to [email protected] .