In Texas, a Homeowners Association (HOA) can collect fees from property owners called assessments, either paid regularly or as one-time payments for specific reasons. Some owners might have trouble paying them on time, resulting in late fees that can accumulate into significant amounts. Depending on the situation, owners can request payment plans to fulfill these overdue fees.
Sometimes, HOAs can send the owner’s account to a collector, who will contact the owner regarding their debts. If this happens, they must perform their duties in compliance with relevant collection policies. This option could also lead to collection fees, often shouldered by property owners. If so, HOAs should take proper measures to charge these expenses lawfully, including the following:
- Send a written notice to the owner by mail
- Ensure the notice contains an itemized list of all overdue fees
- Inform the owners about payment plans they can use, which can prevent the use of debt collection services
- Indicate the deadline for outstanding payments, indicating collections to begin afterward
The appropriate course of action could vary based on the circumstances, especially if there are existing disputes and pending legal cases. The HOA should also adhere to specific timelines, enforcing lawful deadlines for each step. An association should also refrain from reporting these overdue fees and fines to credit reporting agencies without following due process.
Conducting collections appropriately
HOAs have options to deal with overdue fees, including foreclosing on an assessment lien, potentially leading to the property’s sale. Even so, associations should complete the appropriate procedures before resorting to this last resort. The proper collection process exists to maintain fairness and do right by the HOA and the owner.