HOA and Condo Delinquencies is still a Problem
With the economic recovery it would seem that community associations are out of the woods and happy days are here again. Sorry, but no. According to the Community Association Institute (CAI) the average delinquencies nationwide is north of 5% and that is still not acceptable.
You may see new projects popping up all over and prices on the rise but chances are you are still plagued with delinquent owners, saddled with doubtful debt and are low on reserves. Sure, its not as bad In other words your association lacks the financial vitality it should have in order for it to be a worthwhile investment. Curb appeal and amenities aside buyers are now more cautious and considering how financially robust the association is before they make their purchases. There is still a lot of work to be done for many associations.
This is a problem that has not gone away and will continue to linger, but because many boards of directors have become so accustomed to having delinquencies and doubtful debt on the books they may believe that the storm has passed and it is safe to go back in the water. The truth of the matter is that no amount of delinquencies are acceptable in a “zero dollar business” (community associations are not for profit entities) and there is still a lot of debt on those books that need collecting.
Your association, now more than ever, must make a push to collect what is owed and bring the community back to health. Buyers are not just looking at the square footage and view but are also considering the financial stability of an association when they are making their purchasing decisions. Would you buy into a community association where a special assessment was inevitable? Lets learn from the last crisis and be proactive instead of reactive and put into place a HOA & Condo Collections policy for your community association.
If nothing else community associations should be coming out of this crisis with a better understanding of what the dynamics are and how to manage delinquencies. What did not kill you should have made you stronger and smarter. Some lessons learned are that collections delayed are collections denied, that there are many options an association has in order to effectuate a successful HOA & Condo collection, there are many types of professionals who can make that happen and most important delinquencies no matter how few or how small are not acceptable. The crisis may seem to be over but a problem still remains. Call Mitch Drimmer to discuss what can be done to resolve your HOA & Condo Collection Issues.