Reviewing the association’s financials on a regular basis is one of the cornerstones of managing an association and fulfilling one’s duty as a board member. Ideally you will not have any delinquent accounts to address, but in the real world, there are usually a few owners who have failed to pay their assessments.
Board members and management companies routinely face the dilemma of what action to take on a delinquent account before it is sent to the association’s attorney. Many associations adopt policies to address how a delinquent account is handled. Everything from how many days past due to start the collection process, to late fees and payment plan options. Many of these items are addressed in the association’s declaration – others are not. As a result, a policy can help streamline the process so both the management company and board are on the same page.
On July 1, 2021, an important change to the collection process became law which requires both a Homeowners Association and Condominium Association to deliver by first class mail a Notice of Late Assessment. This new notice can be used in place of a reminder notice your association may have previously sent, or in addition to the reminders and past due notices already in place. However, if you intend to collect the legal fees incurred during the collection process, then this is a required step in the process before you send the account to your attorney for collection action. Your attorney can also send the Notice of Late Assessment for you, but those legal fees will not be collectable from the delinquent owner.
The forms provided in Florida Statute 720.3085 (HOA Act), 718.121 (Condominium Act) and 719.108 (Cooperative Act) are straightforward and can be easily turned into one of the association’s normal delinquent account notices. The form provided in the statutes requires the following key elements:
- Notice of the debt to be paid in 30 days from the date of the letter;
- Notice that the Association will proceed with further collection action against the owner if the debt is not paid, but not sooner than 30 days after the date of the letter; and
- A breakdown of the amount owed.
If you are not already sending this 30-day Notice of Late Assessment, please review the statute and add it to your process/policy. If you require assistance putting the form together, or would like your collection policy reviewed to confirm you are following the requirements of your governing documents and the Florida Statutes, contact your association attorney today.