Collecting Delinquent Homeowners Association Fees!
Posted on 26. Apr, 2011 by briankoeberle in Real Estate
Homeowners association fees and assessments are the lifeblood of private residential communities. In today’s economy, many HOA’s are faced with increasing delinquencies in their respective communities. However, if your HOA isn’t vigilant about collecting delinquent assessments, the other owners end up having to pick up the slack. If the situation goes on too long, home values and resale of units begin to suffer, as the HOA becomes short of funds necessary for the upkeep of the community. Common areas become run down, roads deteriorate, and essential services like snow removal, security and garbage pickup suffer. Equally important, lenders are avoiding communities with high delinquency rates. Freddie Mac, Fannie Mae and the FHA are all refusing to write new mortgages in communities where more than 15% of owners are delinquent in HOA fees.
So what is an HOA to do to collect delinquent fees from “deadbeats”? Look to both Pennsylvania common law, as well as the statutory authority of the Uniform Condominium Act (UCA) or the Uniform Planned Community Act (UPCA), for relief. PA courts have long held that owners of property in private residential communities have an implied obligation to pay their fair share for the upkeep of the roads and other common areas of the development.
The UCA and UPCA both give HOA’s statutory authority to collect assessments and fees from all property owners. The Acts create a “statutory lien” against the property of a delinquent homeowner, which can be “foreclosed in a like manner as a mortgage in real estate”. However, the association’s lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years after the assessments become due. Another option for the HOA is to file a breach of contract claim against the delinquent homeowner, which is subject to a 4-year statute of limitations. So insist that your HOA collect all delinquent dues in a timely manner!
