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Your Collections Questions Answered

Mr. Collections man our community association has some members who are not paying their maintenance fees and our attorney bills are already more than what is owed. Is there no other way to collect these fees without spending more money for these condo collections.


Sleepless in Saratoga

Dear Sleepless in Saratoga:

Of course there is a way to recover your money but your board of directors needs to think out of the box. Your attorney is working hard but all that he/she can do is put a lien on the unit and if you want to become landlords foreclose on the unit and recover your money from rental revenue. Maybe, that is not such a good idea because if a bank forecloses its possible that all you will recover is the safe harbor amount of the lesser of 12 months or 1% you will be out of a lot of legal fees.

I suggest that you consider other methods of collecting your money. Perhaps, a performance based collections company that charges fees that are passed through to the delinquent owner and are only payable if they (the collection agency) can collect from the unit owner, foreclosing bank, subsequent purchaser or even through a surplus in a tax deed sale. Get a company representative from the many collection agencies that specialize in these type of collections in front of your board for a full on presentation and the more you know the better the decisions you will make.


Mr. Collections Man, please help. Our attorney tells us that when a bank forecloses all that he can recover for us is the lesser of 12 months or 1% of the first mortgage. I heard that this is not true in all cases. If we could collect more it would be like a visit from Santa Claus. Is there such a thing as a Condo Santa Claus?


Virginia, The Board Member

Dear Virginia,

Yes, Virginia there is a Santa Claus, and a good possibility that your community association can collect beyond the paltry amount of the so called “safe harbor” amounts (aka Statutory Cap). It all depends on how the bank proceeded with their collections, your governing documents and if they (the bank) moved forward with proper procedure. If the bank did not properly name the association in the law suit, or did not properly service the association for said law suit they may not be entitled to “safe harbor” relief. Also, many of these title companies who are working on foreclosures have authority to peel off a few extra dollars for the community association in order to close out the file and get the property in play. This is critical with condo collections. What you need is to have a condo collections solution that will not only drill down to see if the bank or title company is or is not entitled to safe harbor, but will also put up a fight to GET MORE money for your community association when the time comes. If nobody is working for your association to GET MORE you will not get more but only the paltry amount. Millions of dollars have been left on the table in the last few years.


We have a renter in a unit in our association but the owner has not paid their maintenance fees in over two years. It’s not fair that the owner gets to profit and we the association have to pay for the maintenance of his property. What can be done?


Ticked Off In Tampa

Dear Ticked Off in Tampa:

There are laws on your side that can resolve this problem right away. In Florida statutes 718 (if you are a condo say this) “the association may make a written demand that the tenant pay to the association the subsequent rental payments and continue to make such payments until all monetary obligations of the unit owner related to the unit have been paid in full to the association. The tenant must pay the monetary obligations to the association until the association releases the tenant or the tenant discontinues tenancy in the unit.”  If you live in a HOA the law is just about the same and here I quote again “Pursuant to section 720.3085(8), Florida Statutes, we demand that you make your rent payments directly to the homeowners’ association and continue doing so until the association notifies you otherwise.”

  1. So, I suggest that you check the statutes because there you will find a word for word letter that you should send the renter, cut and paste it into your association’s letter head and mail it out (certified just to be sure). Send one to the landlord as well. Then if the renter does not pay you can step into the shoes of the landlord and seek an eviction attorney for non-payment of rent, and for a reasonable price this tenant can be removed. I would hope that the renter will realize that they are protected from the landlord and pay the association the rent until such time that the ledger is brought down to zero.


Hi Mr. Collections Man:

What are some of the other things we can do besides sending our files to a collection agency or an attorney to encourage members to pay their maintenance fees?


Curious Board Member in Miami

Dear Curious Board Member in Miami:

Charging late fees, and the interest as per your governing documents provide the first incentive to get people to pay and pay on time. You really should never get into the habit of waiving said late fees because then you may be accused of unequal enforcement of the rules. Also, many associations also have the ability to suspend privileges to any member who is delinquent after a certain amount of time (usually 90 days) and to deny them the right to vote in your elections.

The Condominium Act was amended, effective July 1, 2010, to allow associations to suspend use rights in the event an owner is more than ninety (90) days delinquent. Section 718.303, Florida Statutes says in part: “If a unit owner is delinquent for more than 90 days in paying a monetary obligation due to the association, the association may suspend the right of a unit owner or a unit’s occupant, licensee, or invitee to use common elements, common facilities, or ny other association property until the monetary obligation is paid.” This was a real boost to condo collections.

The same goes for the statutes that govern homeowners’ associations operations, as well. Section 720.305, Florida Statutes state: “If a member is delinquent for more than 90 days in paying a monetary obligation due the association, an association may suspend, until such monetary obligation is paid, the rights of a member or a member’s tenants, guests, or invitees, or both, to use common areas and facilities and may levy reasonable fines of up to $100 per violation, against any member or any tenant, guest, or invitee.”



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