If you sit on your community's condominium board, you may have already had the frustrating experience of struggling to collect condo fees from reluctant unit owners. We would like to provide a few tips to help you handle delinquencies and protect your condo community from future problems due to a lack of incoming funds.
Act quickly and professionally
While there is no ideal solution for handling delinquencies, reacting promptly and firmly is important. Remind condo owners that they have a contractual obligation to pay, that their delinquency is not fair to other owners and it is not sustainable to the entire community. By strictly enforcing payment policies, you'll be able to create an environment in which all owners are treated equally and understand what is expected of them.
However, as a volunteer member of the condo board, it is always wise to rely on the knowledge of professionals for guidance. Before giving out advice or putting too much pressure on condo owners to pay up, consult an accountant or lawyer. If you are having trouble getting payment from an overdue account, hire a professional condo property manager or collector. It's also a good idea to refrain from discussing other owners' financial problems outside of board meetings.
Change your rules
Your condo board's freedom to work with delinquent members is limited by its governing documents. Some boards choose to amend their condominium's collection policies in order to get more leeway in handling delinquencies. For example, a policy might be amended to shorten the timeframe for filing a lien or going to collection, or to establish a payment plan that allows delinquent condo owners to pay their dues back over time. These types of changes should be discussed with a professional before being implemented to ensure they are within local and provincial law.
Go to court or file a lien
Although these are not preferred ways to handle the situation for either condo owners or board members, sometimes they are the only remaining options. If you choose to take an owner to small claims court, you will need to seek a judicial order that allows wages or other assets to be garnished to pay the debt. Filing a lien — a legal claim that ensures a debt will be paid when the property in question is sold — is considered a condo board's most effective weapon. Sometimes, the act of notifying owners that you intend to go to court or file a lien will be a strong enough signal to get them to start paying.
It's never easy when a condo unit owner doesn't pay dues, but it's important to know that boards do have some options for dealing with these situations.