HOA collections: A guide for boards and residents

What are HOA payments?

HOA payments, also known as assessments or dues, are regular fees paid by residents in a homeowners association (HOA) to support the ongoing operations and maintenance of their community. These fees fund a wide range of services and amenities, including:

• Landscaping and groundskeeping
   
• Common area maintenance (e.g., clubhouses, pools, elevators)
   
• Insurance coverage for shared property
   
• Security services
   
• Reserve funds for long-term capital repairs or improvements

The board of directors determines the amount of these fees during the annual budget process, typically based on projected operating costs and reserves. Once approved, the assessments are billed to homeowners based on a schedule laid out in the governing documents — usually monthly, quarterly, or annually.

This article is not intended to and does not constitute legal advice or create an attorney-client relationship. Property managers and association board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
 

What are HOA collections?

HOA collections refer to the process of pursuing unpaid assessments from homeowners who fall behind on their payments. When a homeowner misses one or more dues payments, the association is responsible for taking steps to recover those funds.

In Texas, associations may have legal authority to collect unpaid assessments under the Texas Property Code. This can include the right to impose late fees, interest, and even file a lien against the delinquent property when necessary. However, the law also includes specific rules and protections that associations must follow.

Typically, HOA collections begin with courtesy notices and escalate over time, depending on how long the account remains delinquent. The goal is always to resolve the matter amicably and fairly while safeguarding the financial well-being of the entire community.

A property management company like FirstService Residential can help streamline HOA collections and reduce the burden on board members, from tracking payments and sending timely reminders to handling legal notices in compliance with Texas law.
 

How to collect HOA fees in your Texas community 

You probably find the idea of chasing down unpaid dues a bit daunting. Texas associations, in particular, are under greater pressure to address delinquencies quickly since the statute of limitations for community association claims is only four years. Waiting too long to act could result in your association never recovering lost revenue.

Fortunately, there is a more effective and legally sound approach you can take. Here we provide five guidelines for establishing a proactive HOA collection strategy. Implementing this strategy can help you reduce delinquencies and, most importantly, protect the association and your homeowners.

1. Communicate the importance of timely payments.

   Homeowners need to understand that timely dues collection is an essential element of a well-run community. Use as many communication channels as possible — newsletters, website postings, emails, flyers and meetings — to get the word out. Explain what is at risk to the community and the steps the association may take to collect delinquent payments.
    

2. Provide adequate notice.

   Statements for assessment fees are typically sent at the same time each year so homeowners should be expecting them. A best practice is to send statements 30 to 45 days prior to the payment due date, unless otherwise specified by your governing documents. If the assessment fee is not paid by the due date, follow up with reminder letter(s) pursuant to your HOA collection policy. Be sure to include the assessment and late fee amounts, as well as contact information where residents can direct questions and request a payment plan. This process affords the homeowner an opportunity to remedy the situation and can usually happen without the involvement of legal counsel.
    

3. Offer a payment plan.

   Sometimes life brings unexpected surprises that can create financial constraints. Even the most responsible among us may need a little extra consideration from time to time. Providing the option of making several smaller payments over time provides a way for homeowners to address their financial obligations while demonstrating the association’s willingness to work with them. It is advisable, however, that the payment plan brings dues up-to-date before the next dues cycle begins. This may help prevent confusion and further delinquencies. If a payment plan extends past the next billing cycle due date, which is quite possible, it’s best to include the future billing amount in the payment plan.
    

4. If all else fails, seek legal assistance.

   There’s a good chance that diligent and consistent collection efforts by the board will resolve most situations before further action is required. However, if you have not gotten a response from a homeowner after sending initial notices, it is possible that some greater issue is at hand. Your attorney can help assess the full situation and make sure that bankruptcies and other types of potential judgments are not pending. Be aware that state laws dictate specific information you must send to a delinquent owner — as well as the delivery method you must use — before you can turn over the account to an attorney. Your management company should be able to clearly explain these requirements to you.
   
   While it is never what you want, filing a lawsuit for foreclosure may be an option available to the association under applicable law. This is typically a last resort, and many situations can be resolved before this final step becomes necessary.
    

5. Be firm, fair and consistent.

   Work with your association management company to establish clear guidelines for your HOA collections process, and remain dedicated to the plan. By establishing the proper expectations and following through consistently, your board will be demonstrating an objective commitment to do what’s right for the community. As a result, the association should also begin to see the number of on-time payments improve.
   
   Managing delinquencies is never an easy task, but you can be more successful with a consistent, proactive approach. Partnering with an experienced HOA management team can help your community stay on track when it comes to collecting dues.

What happens if you don’t pay HOA fees

When homeowners don’t pay their HOA assessments, the consequences can escalate quickly. Here’s what that might look like in Texas:

First, late fees and interest are typically applied. Most governing documents set out the amount and timeline for these charges. Over time, they can significantly increase the amount owed.
Next, the homeowner may receive formal demand letters. These usually reference the association's right to pursue legal remedies under state law.

If the account remains unpaid, the HOA may file a lien against the property. This lien attaches to the title, meaning it must be paid before the property can be sold or refinanced. Texas law typically requires HOAs to provide advance notice and a chance for the owner to resolve the issue before filing.

In serious cases, foreclosure may be an option. Texas law may permit nonjudicial foreclosure of HOA liens under certain conditions. Associations must follow strict procedures, which may include notice requirements and offering a payment plan. Due to the high stakes and complexity, boards should always consult legal counsel before initiating any foreclosure process.

Beyond legal consequences, communities can suffer when assessments go unpaid. Budget shortfalls can impact maintenance schedules, amenity upgrades, and long-term planning. That’s why addressing delinquencies promptly and effectively is so important.

With the right strategy, clear communication, and a trusted management partner by your side, your board can protect the financial health of your community and support homeowners through even the most challenging situations. FirstService Residential has over 30 years of experience helping Texas boards implement effective, legally compliant HOA collections practices. To learn how FirstService Residential can support your community, contact our team today.