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HOA options when there are unpaid dues

On Behalf of | Sep 5, 2023 | Homeowner Association Law

An HOA must enforce the community’s bylaws and the association’s rules and regulations, and mandatory maintenance fees provide the funds necessary to accomplish this. If residents stopped paying their dues and the association could not force a collection, there would not be enough money to maintain the common areas, pay the security guards or pay for trash service. Missouri has no standard regulations for homeowner associations, so individual communities may choose different collection approaches.

Send a notice

Sometimes, people may get so busy that they forget to pay their monthly fees. If that’s the case, a non-threatening letter from the association may bring them back on track. If it doesn’t work, the association gradually turns up the heat.

Restrict recreational privileges

The HOA may disallow delinquent owners from enjoying amenities like a pool, tennis court or golf course. If the owners are active participants, this step may incentivize them to pay what is due.

Hire a collection agency

Sending a debt to a collection agency may affect an individual’s credit score and subject them to constant phone calls. Many homeowners want to avoid this and will pay their fees in exchange for some peace and quiet.

File a lawsuit

If the owner still doesn’t pay, the HOA can file a lawsuit to have the court place a lien against the property for the unpaid amount, which will continue accumulating. If the owner plans to sell the property, the sale proceeds pay the lien off before the seller receives their profit. While that might not worry the debtor, the HOA also has the right to foreclose on the property to recover its losses. It is unfortunate if things progress this far because the owner will lose their home.

HOA board members should strive to avoid confrontation. However, the community needs everyone to contribute their fair share to maintain the standards the residents expect and demand, so the HOA should not hesitate to take forceful action when necessary.