I
was recently reading a post on a very popular business networking website (you
know, the one that asks you to “link” with other professionals!). The post came from the board member of a
homeowners association. The board member
asked, “We have one Owner 15
days passed due with his Special Assessment should I turn it over to our Lawyer
and start charging daily late fees?”
That isn’t a typo, the question
was should an attorney get involved because someone is fifteen days
late. Note, he/she also asks if they
should start charging daily late fees.
The first two responses came from
community association managers. Here, in
the exact order of the postings are their comments:
Response
#1
“Not no but heck no. Even the evil-ones
at megabanks won't even try something that aggressive. Actions like that make
for tense and unhappy association. There are times when collections efforts are
needed but it should take months to get to that point. Not days. Translation -
be neighborly.”
Response #2
“It's not your money. Neighborly has
nothing to do with it. When the special assessment went out it should have had
deadlines and information on what would happen "IF." Follow the
"IF," or contact the Board for their direction. I'd rather have
someone no [sic] like me for doing my job then for NOT doing my job.
What state? In Florida, generally
anything past 10-15 days can be considered as delinquent. A reminder is sent,
then if past 30 days referred to the Law firm for collections. No [sic] a matter of
being non-neighborly, just a matter of business.
During this 30 day period, the Unit owner can writew [sic] to the Board regarding any circumsatnaces [sic] that will allow the Board to consider a payment plan; however, they have to be careful not to set a precendent [sic] that would affect all Unit owners. (I left in the misspellings in this posting because I wanted you to see that the writer made the response so quickly and possibly without careful thought, that there were several misspellings.)
During this 30 day period, the Unit owner can writew [sic] to the Board regarding any circumsatnaces [sic] that will allow the Board to consider a payment plan; however, they have to be careful not to set a precendent [sic] that would affect all Unit owners. (I left in the misspellings in this posting because I wanted you to see that the writer made the response so quickly and possibly without careful thought, that there were several misspellings.)
Let’s step back for a moment and think
about why we even have homeowners associations.
First, as developers began to build communities consisting of several
homes, the necessary government permits and approvals came with a price
tag. The governmental entity would allow
the construction if the developer took on the costs and the subsequent
maintenance of certain infrastructure necessary for the community, such as
drainage, stormwater management, or street lights. The developer happily accepted these
requirements because they simply passed the future responsibilities and costs
to maintain onto the subsequent home purchasers. They filed restrictions in the Public Records
that attached to the land that ensured that all future owners of the property would
be responsible for these facilities.
They also established non-profit corporations, referred to as
associations, that would be run by the homeowners who would be responsible for
overseeing that money was collected from the owners and the maintenance was performed.
Then the developers began to see a
market that many people found desirable, living in a community in which all of
the houses and yards would be consistently maintained and free from junk and
decay. So the developers began to add to
the restrictions in order to help “protect property values.” The right to ensure this protection finds its
roots in the original U.S. Supreme Court cases that upheld zoning laws (and
other similar laws), finding that municipalities held “police powers” that could
be asserted for the protecting the public welfare, health and safety of the
community, which included passing laws putting restrictions on what can and
can’t be done with ones own real property.
The problem then became, how do we
enforce these restrictions that are suppose to ensure that we retain our
property values? Associations then
started to charge fees to pay for the community’s obligations and a whole new
cottage industry emerged consisting of community association management
companies and lawyers, whose sole purpose was to ensure conformity and to ensure
payment of the assessments necessary to ensure conformity.
The question is….do these restrictions
really protect our property values? Is
your property really going to lose its value because your neighbor painted
their house orange instead of beige? Are
people not going to want to buy in your community because the guy across the
street parks his car in the driveway instead of the garage? Maybe, but then again, maybe not. Certainly some people only want to live in
perfectly maintained homes and communities that ensure this quality is where
these people will seek to live. On the
other hand, some of the most desirable and highest valued homes today are in old,
urban neighborhoods that have gone through a massive revitalization but where
there are still some homeowners that have no intention of renovating and updating
their homes. These neighborhoods see
multi-million dollar homes built right next to 1950’s style houses that haven’t
been painted in over 30 years! The owner of the multi-million dollar home may not like that the neighbor's house is old and in decay but they don't care because the are is the new "hot" community and people are paying high prices to live there.
I pose this question, if your primary
purpose for living in a specific neighborhood is to maintain your property
value, wouldn’t advertising that your community is run by a “neighborly and
friendly association” be a good marketing tool?
Isn’t there a market for people who want to buy a new home, within a
nice community with rules and restrictions but one that is run by people who
are reasonable? Why do we believe that a house that is painted orange will lower your property values but overzealous associations do not? The second respondent to the post (above) states that you don’t
want to set a “precedent”! But what
precedent are you setting? That you are
understanding and willing to be neighborly and work with people? That you are not unreasonable, unyielding and
intolerant of a possible oversight or worse, personal crisis that resulted in
the missed payment?
To be sure, many, many people simply
stop paying their required dues because they are either in a fight with their
association or they simply are playing games.
But there are also many, many people who have very good reasons for
missing one or more payments. Imagine
your community having a newspaper article written about it because the
community showed compassion for a neighbor.
Then imagine your community having a newspaper article written about it
because you went forward with foreclosing on someone’s home because they were
delinquent in paying their yearly association dues of $175.00 (I chose $175
because of a recent mediation that I facilitated – stay tuned for my next post). In which community do you think prospective
home purchasers would want to live? Do
you want to live in the community that is managed by poster #1 or poster #2?
As always, stop and consider talking to
each other and if you can’t resolve the issue then consider calling a
mediator. If it still can’t be resolve,
that’s when you should call your attorney.