How Does Your Firm Handle Collections On Behalf Of HOAs And Condo Associations?
Typically, the associations and their respective board of directors will sit down with me and will talk and hash out how we are going to deal with the procedures. Oftentimes, the management company is the first one that has contact with an owner that is delinquent on assessments whether they are special assessments or regular assessments or fines and that’s usually the first step and when that doesn’t work, then they hand it over to me and the first step there is, if it’s an HOA, we issue a demand letter that gives them 45 days to pay the amounts that are incurred and are delinquent and if they pay within the 45 days plus the other fees that are on there and the cost of drafting and sending out a letter, then they are fine.
If they don’t then we send out another letter that says that we are going to file a lien against your property and give them a copy of the lien that is going to be filed in the public records and they have another 45 days to pay the amount of the assessments which normally would have gone up by then, the interest has gone up, the attorney’s fees have gone up but if they pay within the 45 days, then the matter is closed. If they don’t pay within the 45 days then the HOA can go ahead and file a foreclosure proceeding where they can ask either for the property to be sold at a judicial sale and if a third party buys it, it means the HOA gets their money, if not then the HOA can take ownership of a property or you can also do a complaint pleading the alternative And ask for monetary damages so you get a money judgment against the owner for the delinquent amounts.
With a condominium association, you only have to send one notice and basically, it’s a 30 days notice where you have to pay the amounts that are going to be liened and you can go ahead and foreclose after the 30 days. So it’s a little quicker procedure with the condominium association and then I sit down with the board and I discuss with them the pros and cons of foreclosing on a particular property and sometimes they choose to go ahead and foreclose on a property and sometimes they choose to keep trying to negotiate or to make a payment plan or things of that nature. So it’s kind of on a case by case basis and it’s an association by association basis in how they want to handle it.
Some associations want to be very aggressive and send a message to the residents that delinquent assessments aren’t going to be tolerated because everybody else has to pitch in and cover for those assessments and some take a more relaxed approach. It kind of depends on which association you are dealing with.
What Compliance With Fire Sprinkler Systems Must An HOA Or A Condo Association Meet? How Does Your Firm Assist Clients In Doing So?
It’s relatively new legislation that’s come out and the interpretation by most attorneys is that, because it references the fire code and so, if the building is less than 75 feet, then the retrofitting is not required. Now, what I have done with associations pertaining to this legislation is to tell them if they are less than 75 feet, it probably doesn’t apply and it may not be a bad idea to cover yourself from a liability standpoint, to go through the opt-out procedure that is described in the statute. So if you have the members and you garner enough votes, you opt out of the retrofitting and not only do you have the argument that it doesn’t apply because the fire code is referenced and that’s less than 75 feet but you also have the additional argument that you opted out of any retrofitting.
If it’s over 75 feet, then you still need to, at that point, you are either going to need to go ahead and retrofit which costs a lot of money especially if you have a lot of buildings in the association. So you need to either do that or you definitely need to opt out at that point. So there are two ways of doing it and one is to go ahead and retrofit and the other is to take a vote and get the requisite number of votes from the members and have it filed by a typical timeframe. Once that is done, you can opt out of the retrofitting, however, you still need to comply with what are referred to as lifesaving systems or life protection systems which is probably cheaper than retrofitting but you still have to make sure that you are in compliance with that part. That part, you can’t opt out of and the requirement has been in place because most of the ladders that fire rescue uses don’t go above 75 feet. So they still have that requirement. It’s just that you don’t have to retrofit the entire building if the association opts out properly.
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