Will We Receive Updates On The Progression Of The Collection Process?
An attorney has a duty to the association and any client to keep them abreast of the status in any particular case, regardless of whether it’s in litigation. Some associations or clients will want status reports more often than is required, but there are certain status thresholds where the attorney has to keep the client advised. If there is money that is collected, then it will go out to the association, and the benefit will be written out to the attorney in the attorney’s trust account. The attorney has a fiduciary duty to turn those funds over in a timely manner so that the client, the board, or the association itself is kept up to date. Is it published to everyone who lives within the community? No. Does that mean that no one has access to it? Again, the answer is no. There are some associations that do this, but I think that it poses a very dangerous risk, especially if something is done improperly. If an owner wants to see the assessment records of a particular (or every) owner, then they can make an official records request and the association will be obligated to turn over that information. This means that these records are accessible to anyone, but not automatically provided.
What Preventative Methods Would Your Firm Advise To Mitigate Collection Issues?
The preventative methods that would be advisable for mitigating collection issues are related to market conditions, job opportunities, and the stability of the owners within the particular association. Associations have to create a budget on a yearly basis which is approved by the board (as opposed to the association). If the association is not actively pursuing collection cases that they should be and they are not leaving money on the table, then they are just going to have to raise assessments on everyone else who is paying. In condominium associations, there are limits to that, but in homeowner associations, there aren’t—with the exception of the fact that owners will get upset if the assessments are raised too much, and as a result, the board of directors may not remain seated. In addition, there is nothing to prevent a judge from saying this it is patently unreasonable to charge over a certain amount given the common areas and amenities provided by an association.
An attorney will go through the governing documents to ensure that they are not only up to date, but that they address specific problems that may be unique to a particular association. When I bring the association on as a new client, I will be sure to look for any problems with the governing documents that may need to be amended or restated.
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