COLLECTION OF DUES + ASSESSMENTS
The collection of dues and assessments in condominium associations is one of the most important issues. The association has to pay the bills and needs a steady flow of income to do so. Every condo owner has to understand that the association can only function when all owners pay their share.
No association can afford "deadbeats," but that doesn't mean associations should go overboard trying to collect dues and assessments.
The Florida Condo Act -- under the headline: Assessments; Liability; Lien and Priority; Interest; Collection -- takes a whole chapter (FS 718.116) to describe in detail how these issues should be handled. Attorneys, hired to collect these dues, have to follow the rules THE FAIR DEBT COLLECTION PRACTICES ACT -- even if they don't seem to like it!
In order to avoid costly legal battles over dues, there should be guidelines in place that protect both owners and associations. It makes absolutely no sense to start expensive collection procedures over a small amount of dues owed. And it makes no sense for the board to hand over an account for collection to an attorney without making sure that the amount is really unpaid. Contact the unit owner before committing funds for collection purposes.
It seems to be pretty common -- management companies or not -- to see owners receive expensive letters from attorneys demanding payment for amounts that have been long paid. Then what?
Who pays the attorney's fees already accumulated? Some associations even try to hold the owner responsible for the cost, despite the fact that it was obviously an association accounting mistake.
It makes no sense when the association tries to collect $100 and incurs a cost of $500 to process the collection claim -- that's absolutely bad business. And once the attorney gets involved, everybody pays -- that's for sure!
It is imperative that you have clear guidelines, just in case the situation goes to litigation. And it is important that you make sure, best by sending a certified letter first, that the owner is aware that collection procedures are about to be initiated. That avoids as well the problem of finding out later that this owner actually paid and the payment was just credited to the wrong account. It can get very embarrassing as well as costly!
Make sure your association board has guidelines in place that cover all possibilities and avoid flaws that can be very expensive -- for owners and for the association alike.
Here is an excellent example: