A dues collection strategy is vital to the financial health of any association. And for this 600+, single-family home community in Grand Prairie, the number of outstanding payments had reached a dangerous level. In spring of 2014, a new board was elected and community oversight passed from declarant to homeowner control. Although the declarant board left the association with a generous cash reserve, it didn't consistently execute a dues collection process. In fact, the delinquent balance had reached $145,000, or 60 percent of the total annual dues revenue, presenting a severe cash-flow concern.
As their new management team, FirstService Residential worked with the board to help establish operating procedures for managing dues and educate them on the do's and don'ts of homeowner collections. Once they established a policy, filed with the county and communicated with homeowners, it was put in action.
"It's our job to educate our board members about the impact delinquencies have on the community and to remind them that it's their responsibility to enforce the governing documents with all homeowners," said Jeff Hampshire, senior community manager in Dallas. "Every resident enjoys the benefits of their managed community and should be expected to do their part; this includes paying dues on time."
The board outlined a collections process that included timely communications clearly stating the balance, due dates and payment plans. Here's their method:
This may appear to be a straightforward process, but the challenge was managing homeowner response and expectations. The FirstService Residential management team helped the board maintain an objective perspective by providing guidelines for engaging homeowners:
After implementing a firm collection process for two years, the community reduced its total outstanding balance to $28,000! Thanks to the board's consistency, more homeowners are making on-time payments and the number of delinquent accounts continues to dwindle. When asked what helped steer things in the right direction, the board president cited the solid partnership between the board and FirstService Residential.
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